by Michael Hudson
Writer, Dandelion Salad
michael-hudson.com
August 4, 2014
Image by Leo Reynolds via Flickr
Part S in the Insider’s Economic Dictionary.
S-curve: The typical shape of growth in nature, such as human beings whose height tapers off as they reach maturity. They also typify most business cycles, which taper off after an upswing as employment, raw-materials and resource limits are approached and wages and commodity prices rise, slowing profits. The demand for specific products likewise tapers off as markets become saturated. Meanwhile, the fact that financial claims and debts tend to grow at compound interest means that financial dynamics tend to outrun the S-curve of production and consumption, creating business crises which end the upswing. Continue reading
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