Thinking Outside the Cycle

Sounds that we hear on the radio are the product of music being superimposed on carrier waves. In a similar way, the economic cycles we have seen in recent decades have been carried on the evolution of the information technology (IT). In this paper, we put forth our view that the current financial crisis is driven by a structural change from outside of the financial world. Developments that alter the path of economic growth of the world are deemed to be structural changes. We believe that the IT revolution was a structural change in this sense of altering the path of growth and has been a root cause of the two most recent business cycles. An important factor that is often missed is the causal (cause and effect) relationship between various sectors and fields, which will prove to be important for decision-makers, policy-makers and researchers.