Simon Kuznets discovered the 15–25 year economic swings

Person: Simon Kuznets
Lived: 1901–1985
Field: Economics
From: Russian-born American

The story

Simon Kuznets arrived in the United States in 1922, a young economist from the Russian Empire who had begun his studies in Kharkov. At Columbia University he studied under Wesley Clair Mitchell, a leading student of business cycles, and earned his bachelor's degree in 1923, his master's in 1924 and his doctorate in 1926. From 1925 to 1926 he worked as a research fellow of the Social Science Research Council on long-term patterns in production and prices.

This first major project examined long series of economic data for the United States. The figures covered 1865 to 1925, and for some measures reached back as far as 1770. Kuznets fitted mathematical trend curves, such as Gompertz and logistic curves, to the series and compared the theoretical and actual values. The deviations revealed medium-term waves of economic activity lasting roughly 15 to 25 years, longer than ordinary business cycles but much shorter than the half-century "long waves" described by Nikolai Kondratiev.

To understand what drove these waves, Kuznets studied population growth, construction, capital and national income. He linked them to demographic forces, especially the inflow and outflow of immigrants and the changes in building activity that followed, which is why such movements were also called building or demographic cycles. The results appeared in his 1930 book Secular Movements in Production and Prices, which he defended as his doctoral thesis.

Economists and economic historians came to call these movements Kuznets cycles, or long swings in the economy's growth rate, a name associated with the later work of Moses Abramovitz. Some have since read them as cycles of infrastructure investment or of land values. Others questioned whether the swings were partly a product of the statistical methods used, and the debate is part of the idea's history.

The project also set the pattern for Kuznets's whole career. He distrusted speculative theory and preferred to build hypotheses from carefully assembled data, an approach that later produced the first official US national income figures and helped turn economics into an empirical science.

Why it matters

Kuznets's long swings showed economists how population, immigration and investment can shape booms and slowdowns over decades, not just years.

About Simon Kuznets

Pinsk-born economist who built the first official estimates of US national income, laying the foundations of GDP, and won the 1971 Nobel Prize for his empirical study of economic growth.

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Simon Kuznets

1901–1985 · Economics

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