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About our economic analysis:

The prevalence of business cycles in capitalist economies

We analyse developments in the global economy and its financial markets through the lens of business cycles. It is through this lens that we understand the current disruptions in technology, the shift in global economic power, and the remarkable turbulence in global markets for stocks, bonds, currencies and commodities.

Although most analysts attribute economic downturns to random shocks, the evidence available points to recurrent cycles in economic activity both on a global- and local scale. It is for this reason that recessions, and accompanying stock market corrections, can be predicted when examining the relevant data.

A prime example is the global economic downturn and stock market correction in 2020. Although the Covid-19-related lockdowns without a doubt triggered the event, a multitude of indicators were signalling a major weakening of the global economy already in 2019; among which were the contraction of industrial production in most major economies, the contractions of Chinese exports and imports, and the unusual distress in US money markets. A more detailed analysis can be found here.

While the 7-11 year cycle, also known as the Juglar cycle, is the best-documented business cycle, there is another cycle that should be receiving more attention at this very moment in time as it helps explain several of the major developments we see today. For instance, it helps explain why recessions over the past few decades have become worse and more frequent; it explains why there is a power struggle between the US and China; and why we’re likely to seen more major technological developments in the coming years.