The Science of Economic Crashes

[Mikebert]

(08-17-2016, 04:24 PM)naf140230 Wrote: Most of those crashes are not important when dealing with the subject Michio Kaku talks about. He also mentions smaller crashes when talking about the first one.

 
Well the title of your post was the science of crashes.  Wouldn't that apply to all crashes, not just the few he mentions? 
 
Moving on, there is a fourth wave he didn't catch, as well as waves before that: 
 

 
What he appears to be talking about from your description is the innovation school of the economic long cycle or Kondratieff wave.  Joseph Schumpeter (1939) first proposed the idea that clusters of innovations were responsble for business cycles.  A new innovation is developed, it builds into an invesment bubble which pops, leading to a recession.  He envisioned a nested series of ever-larger cycles, ordinary business cycles, longer Juglar cycles, longer-still Kuznets cycles (linked to the 19th century panics) and finally fifty-year Kondratieffs, which relfect the development of whole new economic sectors (this might be what Kaku is focusing on ). 

Gerhard Mensch (1979) formalized the Schumpeterian long cycle as arisng from specific clusters of fundamantal innovations spaced about 50 years apart.  Harry Dent (early 1990's) developed some of these ideas in his innovation wave (the article of mine I linked to talks about this).  Dent did not mention Mensch, but his work was not academic (he's an investment adviser). George Modelski (1980's) developed a Mench-type idea further to include pre-industrial waves. The figure above I constructed using Modelski's concept of periodic leading sectors.  He and William Thompson (1980's I think) married these ideas to fluctuations in relative military strength amongst the great powers and came up with their Global Leadership cycle (google that you'll find out more).  Jordan Goodspeed, who used to post a lot on T4T is a Modelski and Thompson fan.

So Kaku follows in a long tradition.  I asked if he mentioned any of these folks in his book.  Is he aware of the work that came before?