Skyscrapers and Business Cycles

24 Pages Posted: 2 Jun 2012

See all articles by Mark Thornton

Mark Thornton

Senior Fellow; Auburn University, College of Business,Department of Economics

Date Written: May 31, 2012

Abstract

The skyscraper index, created by economist Andrew Lawrence shows a correlation between the construction of the world’s tallest building and the business cycle. Is this just a coincidence, or perhaps do skyscrapers cause business cycles? A theoretical foundation of “Cantillon effects” for the skyscraper index is provided here showing how the basic components of skyscraper construction such as technology are related to key theoretical concepts in economics such as the structure of production. The findings, empirical and theoretical, suggest that the business cycle theory of the Austrian School of economics has much to contribute to our understanding of business cycles, particularly severe ones.

Keywords: Austrian Economics, Business Cycles, Cantillon Effects, Prediction

JEL Classification: C53, E37, l16

Suggested Citation

Thornton, Mark and Thornton, Mark, Skyscrapers and Business Cycles (May 31, 2012). Available at SSRN: https://ssrn.com/abstract=2071293 or http://dx.doi.org/10.2139/ssrn.2071293

Mark Thornton (Contact Author)

Auburn University, College of Business,Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States

Senior Fellow ( email )

Auburn, AL
United States