| This thesis attempts to explain the apparent phenomenon of a postwar long-wave of the capitalist economy. In view of the uniformity of the long-wave, which affects every industrial economy, and in view of the increasing interdependence among individual economies, the thesis tries to elucidate the long-wave in terms of changes in the international environment which conditions the performance of national economies.;The international economy often gets into a widespread and persistent balance-of-payments disequilibrium. Because of the asymmetric burden of adjustment and the limited effectiveness of price (exchange rate) adjustment to a disequilibrium, an international balance-of-payments disequilibrium is adjusted primarily through deflation as evidenced by the postwar international economy. Under these circumstances, the growth of deficit countries is constrained by their balance-of-payments conditions.;There is a tendency of cumulative causation in the international economy. A deficit country tends to have slow growth due to balance-of-payments constraints and then its slow growth tends to aggravate its external position due to its slow accumulation and consequent worsening non-price competitiveness--a vicious circle of slow growth and external deficit. The same causal sequence applies to a surplus country with an opposite result. It follows that the international economy, once in a balance-of-payments disequilibrium, generates further disequilibrium.;Because of these two elements of the international economy--deflationary adjustment and the cumulative causation of balance-of-payments disequilibrium, the external constraint on the growth of deficit countries tend to get ever more severe and to lead the whole international economy to slower growth over time because of the international linkage effects--an inherent tendency toward a long-term crisis.;When a crisis in the international economy gets deep, the pressures for direct political interventions becomes intense. If there is a single hegemonic power in the international economy and the nation launches direct political intervention to stem the crisis tendency, by facilitating technology transfer as well as capital flows across nations, then the inherent tendency toward a crisis can be overcome or even reversed. Based on this theoretical framework, the postwar long-wave of the international economy is explained by the rise and fall of US hegemonic leadership. |
