Economists' Controversies about the Causality between War and Economic Cycles

The issue of the link between wars and economic cycles and the sense of the causality has given rise to many economic studies. The statistical works of N. D. Kondratiev11Kondratiev (1935). This paper is a synthetic presentation of Kondratiev's works during the 1920s. in the 1930s, showing the existence of long economic cycles regulating capitalism, have contributed much to the economic cycles' theory. This analysis based on the observation of long-term economic changes in GDP growth rates and/or price levels shows some rising and declining phases, as well as reversal points of the cycles. Among the most easily identifiable phenomena are the following: the economic crisis of the 1930s, the post–Second World War growth period, and the economic crisis that started in the 1970s. However, as shown by a study of Tylecote, A. (1992). History as a forecasting tool: The future of the European economy in a long-wave/long-cycle perspective. Review of Political Economy, 4(2), 226–248. The long economic cycles are less identifiable for the period 1850–1930, unless the disruptive effects of the American Civil War and First World War are considered: their recessive and then reflationary effects would have disrupted the rising and declining phases. But some analyses present war as being a central factor in long-term economic changes.

Modelski, G. (1987). Long cycles in world politics. London: Macmillan of long cycles had become very famous in the 1980s. It identifies cycles of 100–120 years, starting with an exceptionally long global war (it may also be a more discontinuous phase of war, like the two world wars) and giving rise to a new dominant power. Its technological and commercial domination permits keeping an uncontested supremacy, until some competing powers start to erode it. However, this theory does not focus on the links between major wars and long-term economic changes.

This issue having been largely studied in the past, the first part of the paper will present a review of these analyses. Then in the second part, it will ask if these ideas may help in predicting future major economic crises and related international conflicts. It is a delicate task, as it is as difficult to show subsequently a link between economic cycles and major wars as to predict future cyclical phenomena on the world economic and political scene.