Kondratieff Cycle

The Kondratieff Cycle, also known as the K-Wave, is a long-term economic theory suggesting that capitalist economies experience recurring cycles of expansion and contraction lasting approximately 40 to 60 years. Named after Russian economist Nikolai Kondratieff, these cycles are driven by major technological innovations and shifts in capital investment. Each cycle is characterised by phases of boom, stagnation, and decline.

Proponents of the Kondratieff Cycle theory suggest that the post-2008 financial crisis era represented a period of prolonged stagnation consistent with the downturn phase of a K-Wave, while the rise of digital technology may be driving the beginning of a new expansionary phase. For long-term macro traders and investors, understanding these broad economic cycles can help inform multi-year positioning in sectors and asset classes that tend to outperform during specific phases, such as commodities during inflationary expansions or bonds during deflationary contractions.