Macroeconomic Cycles & Curves

Abstractions about economy-wide dynamics traced as curves and cycles — aggregate supply-demand frameworks, inverted-U relationships between income and inequality or pollution, multi-decade waves like Kondratiev and Kuznets swings, and structural traps such as the Malthusian and middle-income traps.

16 abstractions in this family — domain-specific abstractions that sit near one another in structural-signature space (k-means over structural-signature embeddings). Each is shown with its short description.

• AD–AS Model — The workhorse macroeconomic framework that plots the economy as the intersection of an aggregate-demand and an aggregate-supply schedule in price-level × output space, reading disturbances as curve shifts and diagnosing their source from a four-quadrant typology.
• Aggregate Supply — The total real output producers will supply at a given general price level — sloping up in the short run because wages are sticky, but vertical at potential output in the long run once the binding constraint migrates from nominal rigidity to capacity.
• Balassa-Samuelson Effect — The mechanism by which countries with fast-growing tradable-sector productivity end up with systematically higher price levels and appreciating real exchange rates — because tradable wage gains spill through mobile labor into non-tradable prices that cross-border arbitrage cannot compete away.
• Business Cycle — Read the joint state of a whole economy off one phase label on an ordered ring — expansion, peak, contraction, trough, recovery — by tracking position relative to trend and direction of motion rather than the absolute level of activity.
• Circular Flow — Represent the whole economy as two loops running opposite ways between households and firms, then track every off-loop flow as a leakage or an injection whose sums must balance when the loop closes in steady state.
• Dutch Disease — Trace how a boom in one tradable sector hollows out the others by running a foreign-exchange windfall through two channels — a spending effect that appreciates the real exchange rate and a resource-movement effect that bids up factor costs — so that headline GDP rises while non-booming tradables de-industrialize.
• Environmental Kuznets curve — The hypothesis that environmental degradation follows an inverted-U against per-capita income — rising as a poor economy industrializes, peaking at middle income, then falling as richer populations buy cleaner technique — holding only for local, internalized pollutants, not global-commons ones.
• Kondratiev wave — The contested hypothesis that capitalist economies exhibit roughly 40-60-year cycles of expansion and contraction, driven by clusters of general-purpose innovations whose diffusion generates a long upswing, saturates, and gives way to a depressive phase in which the next techno-economic paradigm gestates — a heuristic placement ladder more than a predictive model.
• Kuznets curve — Read income inequality's response to development as an inverted-U — rising early as a dispersion force (sectoral transition) dominates and falling late as a compression force (skills and redistributive institutions) overtakes it — while checking whether the falling limb is developmental or merely contingent institutions.
• Kuznets swing — Read a roughly 15-25-year cycle in construction and investment as the interaction of two coupled lags — a slow demographic demand pulse against the multi-year build lag of long-lived capital — placing it as the medium octave between the short business cycle and the long Kondratiev wave.
• Malthusian Trap — The demographic-economic dynamic in which productivity gains trigger population growth fast enough to absorb them, pinning long-run living standards near a subsistence floor through a negative feedback loop — until either technology outruns demographic absorption or the feedback's sign reverses.
• Middle-Income Trap — The growth deceleration where a country that rose from low to middle income via factor accumulation stalls before high income, because the engines of the first regime exhaust while the qualitatively different capabilities of an innovation-led regime are not yet built.
• Say's Law (Supply Creates Its Own Demand) — The classical claim that aggregate production generates the income constituting aggregate demand, so a general glut cannot persist — a conditional resting on flexible market-clearing prices, no permanent hoarding, and a loanable-funds market that routes saving into investment.
• Unit-Economics Mirage — The error of judging a business viable from a rising aggregate metric — revenue, users, gross merchandise volume — while its fully-loaded per-unit economics are structurally negative, exposed by testing the contribution on the next unit rather than the average across existing ones.
• Verdoorn's Law — The empirical regularity that labour-productivity growth rises with output growth — a sustained one-point rise in manufacturing output growth adding roughly 0.5 points of productivity growth — so that fast output expansion endogenously induces productivity gains through learning, specialization, and capital deepening.
• Wagner's Law — The empirical regularity that as a country industrializes and per-capita income rises, public expenditure grows faster than GDP so its share of national income climbs — driven by the compounding pull of administrative load, income-elastic demand for merit goods, and Baumol cost-disease.