how do booms/recessions impact people and place

What is an economic boom

• Sustained growth in output (GDP) with rising employment and investment

• Linked to rising confidence, expanding credit and higher consumer spending

• Place effect: cores/growth hubs attract capital and skilled labour; property values rise fastest in cores

• Inequality can widen if gains concentrate in high-skill sectors/places

What is a recession

• Falling economic activity; often defined as two consecutive quarters of negative GDP growth.

• Typically includes rising unemployment, falling spending and reduced investment

• Place effect: peripheral/low-skill places suffer larger job losses and slower recovery

What factors cause a recession

• Financial instability (credit crunch, banking crisis) and asset bubbles bursting (e.g., housing).

• Rising interest rates + high debt reducing borrowing, spending, and investment.

• External shocks: pandemics, energy price spikes, wars, supply-chain distribution, trade collapse

• Demond shock + confidence effects leads to reduced consumption and business investment

How is technological innovation linked to booms and recessions

• Innovation triggers investment cycles (new industries, productivity gains, job creation in hubs).

• Over investment/speculation can create bubbles followed by sharp connections (eg. dot-com).

• Automation can displace routine/low-skill jobs, raising inequality without reskilling/welfare.

• Specially uneven: clusters accumulate talent/capital; non-core areas may lose jobs and tax base.

Kondratieff’s waves of innovation theory

Long ‘waves’ of growth lasting around 50-60 years driven by major technological breakthroughs

Sequence: innovation - boom - maturity/saturation - slowdown/recession - next wave.

Commonly cited waves: steam, rail/steam, electricity/chemicals, oil/auto, IT, emerging AI/renewables

Explains regional rise/decline: innovation ‘cores’ boom while older-industry regions fall behind.