Cover image for Greenspan's taming of the wave, or, A golden age revisited
Greenspan's taming of the wave, or, A golden age revisited
Chevallier, François-Xavier.
Uniform Title:
Bonheur économique. English
Publication Information:
New York : St. Martin's Press, 2000.
Physical Description:
xxviii, 174 pages : illustrations ; 24 cm
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HB3711 .C48713 2000 Adult Non-Fiction Central Closed Stacks

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During Alan Greenspan's tenure at the US Federal Reserve Board, the US economy has consistently outperformed expectations. Greenspan has not been panicked by recessionary pressures and has held faith in the view that, despite short-term setbacks, the world economy is locked into a steady long-term upward cycle and is about to enter another "Golden Age" comparable to that of the late 19th century. The world's rapid recovery from the 1998 Asian crisis supports this theory almost conclusively and has drawn considerable interest from the world's financial and business community. This unique book explains the theory, presents its historical context, shows how Greenspan has harnessed it, and predicts how the "Golden Age" might develop.

Reviews 1

Publisher's Weekly Review

In 1990, with the Dow Industrial Average under 3,000, French portfolio manager Chevallier gave a famous interview in Paris Match in which he predicted "we are on the eve of a world stock market crash of world proportions, much worse than the previous one." Instead, the U.S. stock market enjoyed its best decade ever, with the Dow Industrials rising almost uninterruptedly to near 12,000. Unabashed, Chevallier argues that the world did indeed go through a Great Depression in the 1990s, but U.S. Federal Reserve Chairman Alan Greenspan's economic management disguised the pain for Americans. Those who can accept this may also believe the author's current prediction that we are on the eve of a 30-year period of great prosperity that will rival the golden ages of 1789-1814, 1847-1866, 1896-1920 and 1940-1980. The economic theory underlying these claims is that of the Russian economist Nikolai Kondratiev, who, in the 1920s and '30s, traced 40-to-60-year cycles in wholesale prices, interest rates, wages and production back to 1790. Chevallier updates Kondratiev's work and refines it by postulating three out-of-phase cycles of growth, rising prices and debt. The original French title of this work, Le Bonheur conomique (Economical Happiness), is more descriptive of the contents, and positions it as an answer to Viviane Forrester's popular 1996 book, L'Horreur conomique (Economical Horror). (Jan. 29) Forecast: Breezy and dramatic (as demonstrated by the potent cover photo of a tsunami inundating Wall Street), this book also conveys an optimistic message that may get some media play and compel sophisticated stock market watchers to seek it out. (c) Copyright PWxyz, LLC. All rights reserved

Table of Contents

Edward S Hyman
Acknowledgementsp. xi
Forewordp. xiii
Preface to the English editionp. xv
Prologue: Thank You, Asia!p. xvii
Long waves and short-term cycles: what is it all about?p. xxii
Part 1 The Marvellous Clockp. 1
1 The Theory of the Long Cyclep. 7
The price cyclep. 7
The production cyclep. 11
The long wave and the life cyclep. 17
2 Modelling the Relationships Between Production, Prices and Debt: A Long Wave Approachp. 23
The lag between prices and productionp. 23
The peak of inflation halfway through the production plateaup. 24
Identification of the feel-good era or speculative prosperityp. 26
Introduction of the debt cycle: Irving Fisher's modelp. 29
3 The Test of History and the Pressure of the Current State of Affairsp. 33
The chronology of the three preceding cyclesp. 34
A cross-sectional or thematic approach to the long wavesp. 39
Is there such thing as a fourth Kondratieff cycle: 1937 to 1997?p. 43
Why the 1973 to 1997 period qualifies as the down wave of the latest cyclep. 45
Part 2 The Magnificent Parallels Between the Third and Fourth Cycles and Why Our Depression is Waningp. 47
4 A Parallel Between the 1910s And The 1970s: Stagflation Timep. 51
The abandonment of monetary discipline and the explosion of inflationp. 53
The rise of antagonisms and the race for real assetsp. 54
5 Parallel between the 1920s and the 1980s: Variations on the Theme of the Feel-Good Era Leading to a Financial Bubblep. 59
Parallel with the 1920s: initiationp. 60
Anecdotal similaritiesp. 61
Disinflation and the tide of debtp. 64
Rise and fall of the financial spherep. 67
6 The Crash of 1990 or Burst of the Japanese Bubble as a Resounding Echo of the Crash of 1929p. 75
Marvellous precision of Kondratieff's clock: critical zone, margin of error and catalystp. 76
Margin of error and critical zonep. 77
What would be the catalyst for the Japanese crash?p. 79
Timing, the king's prerogative: but which king?p. 80
7 Parallel Between the 1930s and the 1990s, or the Negative Aspect of this Ongoing 'Creative Destruction'p. 87
The Japanese depression: illustration and textbook case of Fisher's modelp. 88
An escalation in the penalties incurred: Japan, Europe, United Statesp. 93
Influence of the stabilizers: is there such a thing as a 'soft depression'?p. 97
A sequence of magnificent parallelsp. 104
Part 3 Creative Destruction or the Positive Side of Depressionp. 107
8 The Depression Myths and Realities: Fruitfulness of the Depressionp. 109
Depression as a mythp. 110
A regulatory functionp. 112
Fruitfulness of the depressionp. 114
Every cloud has a silver lining (or Seeds of the rebound in creative destruction)p. 117
9 De-leveraging and the Ideal of Popular Capitalismp. 121
Necessary de-leveragingp. 122
Precursory role of corporationsp. 122
Private individuals, in turn...p. 123
Governments themselves on the way to budgetary orthodoxyp. 125
The ideal of popular capitalismp. 128
10 Signs that the Downwave is Overp. 135
Concrete economic signsp. 136
A technological revolution comparable in scope with the invention of the printing pressp. 141
Geopolitical revolution: the extension of development to a new set of countries is not called into question by the Asian crisisp. 143
Conclusion: Breaking the Waves with Alan Greenspan: Tomorrow, the Next Up Wavep. 147
Epilogue: Alan Greenspan's brave new worldp. 153
Appendix I Relationship between the business cycle and interest ratesp. 157
Appendix II Interview, Paris Match, 2 August 1990p. 159
Bibliographyp. 161
Indexp. 167