Kuznets swing
Encyclopedia
Kuznets swing is a claimed medium-range economic wave with a period of 15–25 years found in 1930 by Simon Kuznets
. Kuznets connected these waves with demographic processes, in particular with immigrant inflows/outflows and the changes in construction intensity that they caused, that is why he denoted them as “demographic” or “building” cycles
/swings. Kuznets swings have been also interpreted as infrastructural investment
cycles.
Kuznet's finding was debunked by Howrey (1968). Howrey claimed that the apparent business cycle found by Kuznets was an artifact
of the filter
Kuznets used. Howrey suggested that the same cyclical pattern could be found in white noise
series when the Kuznets filter was applied. However, a more recent spectrum analysis has confirmed the presence of the Kuznets swings in the world GDP dynamics even without the application of the Kuznets filter.
Simon Kuznets
Simon Smith Kuznets was a Russian American economist at the Wharton School of the University of Pennsylvania who won the 1971 Nobel Memorial Prize in Economic Sciences "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and...
. Kuznets connected these waves with demographic processes, in particular with immigrant inflows/outflows and the changes in construction intensity that they caused, that is why he denoted them as “demographic” or “building” cycles
Business cycle
The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
/swings. Kuznets swings have been also interpreted as infrastructural investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
cycles.
Kuznet's finding was debunked by Howrey (1968). Howrey claimed that the apparent business cycle found by Kuznets was an artifact
Artifact (error)
In natural science and signal processing, an artifact is any error in the perception or representation of any visual or aural information introduced by the involved equipment or technique....
of the filter
Filter (signal processing)
In signal processing, a filter is a device or process that removes from a signal some unwanted component or feature. Filtering is a class of signal processing, the defining feature of filters being the complete or partial suppression of some aspect of the signal...
Kuznets used. Howrey suggested that the same cyclical pattern could be found in white noise
White noise
White noise is a random signal with a flat power spectral density. In other words, the signal contains equal power within a fixed bandwidth at any center frequency...
series when the Kuznets filter was applied. However, a more recent spectrum analysis has confirmed the presence of the Kuznets swings in the world GDP dynamics even without the application of the Kuznets filter.