The bible tells of a story about joseph who told the Pharaoh about a seven year cycle. The first seven years would be of prosperity while the next seven would be of anguish and draught. Recording economists argue that this cycle still exist though not as accurate as in Joseph’s time. Recordings have been made from the early 19th century. Recent studies have shown that the seven year wave could be combined into the 50-60 years of economic repetitiveness.
The United States stock market has been investigated and similar economic periods have been recorded. The first seven years are signified by inflation. The next seven years are of bust, followed by recovery then finally the boom (“NGFL Wales Business Studies” 2). The perceived economic tendency is perceived from the Kondratieff wave (Elsby, Hobijn, and Sahin 22). From the eighteen hundreds, three economic periods have been noted. All of them were catalyzed by an invention or breakthrough. In 1853, railroads were invented, while in the 1913, automobiles had a breakthrough, and in 1970 computers were invented.
The issue most economists work on is what is responsible for these cycles. Many theories have come up through the years. The first theory is the exogenous shocks. Economists argue that recessions are instigated by unprecedented events. A good example is the September 11 attacks and the civil war (Wachter, Song, and Manchester 2009). The second theory is the Keynesian theory. The theory blames the producers’ negative attitude toward investment for recession. This gives forth to the other three cycles. Other theories are the real business-cycle theory and policy mistakes.
The truth behind the seven year cycle can be traced back to the biblical era of Joseph. However, the clarity of the theory has never been established. The seven year cycle as an economic model has never been documented as a result. Governments should take the advantage of this the rumored economic cycle and make sound decisions that will benefit the citizens more according to the periods (Santora, & Sarros 13).
Elsby, Michael., Hobijn, Bart., & Sahin, Aysegül. “The Labor Market in the Great Recession,” Brookings Papers on Economic Activity (2010): 1-69.
Wachter, Till., Song, Jae., & Manchester, Joyce. “”, 2009.
NGFL Wales Business Studies. “The business or trade cycles.” 2 September. 2. (2009): 1-5.
Santora, Joseph., & Sarros, James. “Founders, leaders, and organizational life cycles: the choice is easy – learn or fail!”, Development and Learning in Organizations, 22. 3 (2008): 12 – 15.