3 ms·

Why is it just assumed economic downfalls and recessions should happen every 7-10 years? Self fulfilling prophecy? Bugs in the system?

mooreds 11y ago
Experience. History. Here's a graph from 2013 from Calculated Risk (an economics blog) that shows recessions in blue shading. http://2.bp.blogspot.com/-cF1c7HUBzQg/UV7FqoIP9BI/AAAAAAAAZtU/OQu9QAiguJY/s1600/UnemployMar2013.jpg http://2.bp.blogspot.com/-cF1c7HUBzQg/UV7FqoIP9BI/AAAAAAAAZt...
icebraining 11y ago
The concept is called the Business Cycle: https://en.wikipedia.org/wiki/Business_cycle https://en.wikipedia.org/wiki/Business_cycle As you can see from that page, the theories about what it entails and what causes it are many and varied.
chubot 11y ago
My hypothesis is that it is a real thing, and it has to do with human behavior. 7-10 years is enough time for enough people to forget the pain of a previous crash. It's enough time for a new generation to arise. There are of course other cycles based on human time scales. In movie soundtracks, there is a rule that you should never insert a song 0-15 years old. It either has to be brand new, or older than 15 years. Where does the number 15 come from? Human time scales. A half a generation. The number 5 would be too short, while 30 would be too long. http://www.furious.com/perfect/culturecycles.html http://www.furious.com/perfect/culturecycles.html
- nosuchthing 11y ago
  For an artificially structured system of agreed upon rules that are in everyone's best interest to optimize for prosperity, "human time scales" and emotional memory, in economic systems, should have little influence. Especially considering historical blunders and clear lessons that we've learned.
  - chipsy 11y ago
    It requires human effort to maintain any emotional memory. If you don't contact your relatives with a card or a call to remind them you exist, you don't enjoy a good relationship with them. And if the government doesn't periodically run campaigns like "don't waste water", people forget to conserve it. These are commons goods that the market doesn't ascribe any value to unless it is directly related to current product and service. Hence, we are flooded with advertising. There is advertising everywhere. But there is no such thing for "remember the last boom and bust."
burnte 11y ago
Bugs in the system, inherent to the worker units. Turns out evolution hasn't shaped up to work for the collective good very well or for very long. Once there's an exploitable aspect to the economy, certain types find it and disrupt the system as a whole, causing a rebalancing of the economy.

mooreds 11y ago

Experience. History. Here's a graph from 2013 from Calculated Risk (an economics blog) that shows recessions in blue shading. http://2.bp.blogspot.com/-cF1c7HUBzQg/UV7FqoIP9BI/AAAAAAAAZtU/OQu9QAiguJY/s1600/UnemployMar2013.jpg http://2.bp.blogspot.com/-cF1c7HUBzQg/UV7FqoIP9BI/AAAAAAAAZt...

icebraining 11y ago

The concept is called the Business Cycle: https://en.wikipedia.org/wiki/Business_cycle https://en.wikipedia.org/wiki/Business_cycle As you can see from that page, the theories about what it entails and what causes it are many and varied.

chubot 11y ago

My hypothesis is that it is a real thing, and it has to do with human behavior. 7-10 years is enough time for enough people to forget the pain of a previous crash. It's enough time for a new generation to arise. There are of course other cycles based on human time scales. In movie soundtracks, there is a rule that you should never insert a song 0-15 years old. It either has to be brand new, or older than 15 years. Where does the number 15 come from? Human time scales. A half a generation. The number 5 would be too short, while 30 would be too long. http://www.furious.com/perfect/culturecycles.html http://www.furious.com/perfect/culturecycles.html

nosuchthing 11y ago
For an artificially structured system of agreed upon rules that are in everyone's best interest to optimize for prosperity, "human time scales" and emotional memory, in economic systems, should have little influence. Especially considering historical blunders and clear lessons that we've learned.
- chipsy 11y ago
  It requires human effort to maintain any emotional memory. If you don't contact your relatives with a card or a call to remind them you exist, you don't enjoy a good relationship with them. And if the government doesn't periodically run campaigns like "don't waste water", people forget to conserve it. These are commons goods that the market doesn't ascribe any value to unless it is directly related to current product and service. Hence, we are flooded with advertising. There is advertising everywhere. But there is no such thing for "remember the last boom and bust."

burnte 11y ago

Bugs in the system, inherent to the worker units. Turns out evolution hasn't shaped up to work for the collective good very well or for very long. Once there's an exploitable aspect to the economy, certain types find it and disrupt the system as a whole, causing a rebalancing of the economy.