Abstract
M.Com.
This is a study about the Long Wave in the South African economy in particular
and the world economy in general. The study is both theoretical and empirical in
its nature.
In chapter two the study looks at the four main cycles starting with the phases of
a cycle in general. A true cycle must show some regular pattern of fluctuation,
which may be endogenous or exogenous. The Kitchin 'inventory' cycle of three to
four years, peak to peak, which appears due to overshoots and undershoots of
business inventories. Another cycle, the Juglar or investment cycle has a length of
seven to eleven years, and appears to have been driven by investment in fixed
assets rather than stocks. The next cycle to be investigated is the Kuznets or
building cycle and is driven by some exogenous factor (migration) and is some
fifteen to twenty five years long. The last cycle to be briefly studied in chapter two
is the Kondratieff cycle or the Long Wave of some forty five to sixty years in duration.
In chapter three the author gives a critical overview of some recent Long Wave
theories, which, although not complete, does seek to diminish the present confusion
in literature and to emphasize the complementary nature of the different
approaches. A classification is made of the theories based on production factors.
In this way the theories have been classified as: those which consider the role of
the innovation (i.e. entrepreneurship) as crucial ( Schumpeter and Mensch); the
capital theories (Mandel and Forrester); the labour theory of Freeman; and
Rostow's theory of development and the importance of raw materials; finally the
integrated theory of Van Duijn which does not focus on any specific production
factor.
In chapter four the author does an empirical study in four categories into the existence
of the Long Wave in South Africa. The categories are: Prices; Growth; Unemployment
and Technology. South African and international data series are
used to see where on the Long Wave cycle South Africa finds it's self. Prices of
commodities in the world market place are presented in both nominal and real
price series. South African consumer and production prices are analysed. South
African growth is studied from 1806 and categorised into Kondratieff cycles. Unemployment
is emphasised and data from five sectors has been obtained from
1920 to analyse. The sectors manufacturing, mining, transport, electricity and
construction. Technology is presented in a wider sense as South Africa does not
have much to present in this field. The worlds technology is discussed as are its
effects and then presented in graphical form for the last three Kondratieff cycles
including the fifth Kondratieff.
Chapter five attempts a graphical model of the South African Long Wave. It
presents a short summary of the empirical evidence for South Africa. The basic
conclusion is that South Africa has a Long Wave cycle.