Skyscraper Index: Have You Heard of it?
November 13, 2008
I read this great article today about the Skyscraper Index. It’s a bit dated and you may have already heard of it, but nonetheless I find it very interesting so I figured you might too.
The index was created by economist Andrew Lawrence in 1999 and based upon his analysis, major downturns in the economy has coincided with the development of the “World’s Tallest Building.” The quest for extravagance tends to happen at the peak of any business cycle and by the time the world’s next tallest building is underway, the economy is headed for a significant contraction. Lawrence’s study was based upon 100 years worth of business cycles.
Here is the full 41 page report on the Skyscraper Index written by Mark Thorton of the Ludwig von Mises Institute.
What do you think?
Source: MoneyWeek
Posted in Forex, Forex News, Forex Podcast, forex blog, skyscraper index
content rss
November 14th, 2008 at 8:27 am
Ms Lien,
The observations are correct and it gives us a deep insight into human nature. Buildings of this nature are a statements of arrival, mastery and perceived economic prowess.
It is also the point at which business men and women shift from the principles that brought them success to total reliance on the systems that came out of them. Eg the Dow Jones is an indicator, not the cause of economic activity.
It is when pride enters the heart of society and the thought of invincibility seems achievable.
Buildings of this nature indicate a shift from real productivity to “show off prodcutivity”. They are a turning point in the trend, a high with quick reversal.
It is a general truth that any nation that begins to invest heavily in buildings of this nature (the summit) is on a downward economic spiral.
You have seen well Ms Lien.
November 19th, 2008 at 4:57 am
Isn’t the Taibei 101, built in 2004, taller than the Petronas Towers? http://www.infoplease.com/ipa/A0001338.html
November 19th, 2008 at 10:47 am
Yes you are right