Aug 10 2008

The Twice-per-Century Maslow Economic Boom is Coming Soon…!

In July, 2007 Fortune magazine termed the current worldwide expansion “the greatest economic boom ever”. Continued rapid growth, assuming consistent government policies, was projected by the Congressional Budget Office to 2011. This is precisely the trend one would expect as we approach the economic boom presaging the 2015 Maslow Window. For example, based on economic data corresponding to the previous four Maslow Windows, the GDP for 2025 should reach between two and three times its current value (Cordell, 2006).

However, given the current state of the economy, how can we propose an approaching economic boom that will result in another Maslow decade for society? It’s important to recognize that a Maslow Window is a long-term concept independent of the short-term fluctuations in the economy. The US economy has periodic downturns followed unfailingly by upswings of longer periods, resulting in an overall long-term trend of growth, as demonstrated by US GDP values.

Expansions and contractions of the economy from 1854 through November 2001 have been cataloged by the National Bureau of Economic Research (NBER). Between 1945 and 2001, the “average” recession duration is ten months followed by a recovery period of 57 months. Thus the average peak-to-peak/trough-to-trough duration is 67 months, for a total of ten cycles during the 56-year period. The NBER makes the point that “expansion is the normal state of the economy, (while) most recessions are brief,” and followed by longer periods of expansion.

What of this current period, then, and when can the upturn be expected? Economists identify December 2007 as the turning point for the current downturn in the economy. Based on NBER data for business cycles since 1945, the economy will experience another turning point and move into a recovery period in the fourth quarter of 2008, with an expansion period of nearly five years to follow. This normal sequence of economic fluctuation will carry the US economy into an expansion period through the year of 2013, as we move into the next Maslow window.

The opening of the next Maslow window, however, is becoming less dependent on the US
economy and the ebullience generated among its population, and more associated with the health of the global economy as a whole. Although the rate of growth in more developed countries may slow due to the aging of their population, this will be more than offset by the enormous growth in emerging markets; Fortune cites the 4.5% annual growth in developing countries since 1998. This, paired with emerging technologies, will pave the way for the next Maslow window.

We expect the coming Maslow Window to produce far more significant MEPs and Great Explorations that previous ones, because it will be fed by growth, prosperity, and ebullience on a global scale.

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