Economic Growth and Structural Change: A Possible Explanation of the Long Wave

Paridon, C.W.A.M. van (1985). Economic Growth and Structural Change: A Possible Explanation of the Long Wave. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-85-058

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Abstract

Many of today's most significant socioeconomic problems, such as slower economic growth, the decline of some established industries, and shifts in patterns of foreign trade, are inter- or transnational in nature. Intercountry comparative analyses of recent historical developments are necessary when we attempt to identify the underlying processes of economic structural change and formulate useful hypotheses concerning future developments. The understanding of these processes and future prospects provides the focus for IIASA's project on Comparative Analysis of Economic Structure and Growth.

To understand these economic processes completely however, an identification of the role played by dynamic processes of long duration is also needed. In many economic issues it is imperative to ascertain the parts played by structural and cyclical causes. Such events are studied in so-called long-waves theories which for almost a century have fascinated not only economists. To date there are several long-waves theories that try to explain these causes with varying degrees of success. However, the spectrum of views on the long-wave phenomenon is very wide, including those who question their existence altogether. Nevertheless, the consensus seems to be that the long-wave phenomenon may help in understanding complex economic processes.

This study by C.W.A.M. van Paridon is an illustration of the numerous and various intricate processes one has to consider when trying to explain long-wave behavior. This work was in part prepared during the author's stay at IIASA as a winner of the Peccei Fellowship Award and draws on his previous work on structural change and foreign trade.

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