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SPRING - Inflationary Growth Phase
According to Kondratieff, in this phase, inflation is an inevitable part of growth, and governments, at the same time, are passive participants in the inflation cycle. Growth begins from a depressed economic base and expands in an ever-increasing spiral. The interaction of the participants within the economy causes wealth, as represented by savings, and the production of capital equipment to be accumulated for the future.
The expansion of production and affluence causes prices to rise, and the increased volume of goods requires a higher velocity of money, thus creating a higher price structure. During this phase, unemployment falls, wages and productivity rise and prices remain relatively stable. Historically, the growth phase requires 25 years to complete.
The mood of the growth phase is one of accumulation and the desire for new product manufacture. Accompanying growth is a shift in social demands. As wealth is accumulated and new innovation introduced, great upheavals and displacements take place.
Summer - Stagflation (Recession)
Eventually, the continuation of exponential growth reaches its limit. Excess capital...