Trend movements and inverted Kondratieff waves in the Dutch economy, 1800–1913

This paper presents the results of an effort to dissect 19th century economic growth in the Netherlands into two principal long run components: the domain of the trend and the domain of long waves. Spectral and cross-spectral analysis is used to identify Kondratieffs in volume series. It appears that the long term pattern of development is composed of an inverse S-shaped trend and a Kondratieff wave that is superimposed upon it. Contrary to the British case, long waves in Dutch volume series appear to run contrary to the corresponding long waves in price series. This finding is at variance with the received view on long waves. This typical result is explained by so-called ‘Keynes effect’ in combination with the characteristics of a small open economy that has to dance to the tune of the dominant British economy.