Price movements, both absolute and relative, have received much attention in the long-wave literature. In this chapter my concern is with aggregate price variations; in Chapters 6, 7 and 8 I shall consider relative prices. There are a number of approaches to the Kondratieff price wave. At one extreme, price long waves are viewed as complementing real waves. (Bieshaar and Kleinknecht, 1984; Van Duijn, 1983). At the other extreme, price waves are recognised but are not seen to have any real implications (Friedman and Schwartz, 1982; Lewis, 1978; Van Ewijk, 1981). The failure to find a significant Kondratieff wave in output raises strong doubts as to the validity of the former view and the evidence for significant long-run growth variations raises strong doubts as to the validity of the latter idea. Only if price movements are caused purely by monetary variation, without any relative price changes, can one hold to the dichotomy between economic growth trends and price trends. What I wish to do here is to relate price trends to output trends in a consistent historical framework, allowing for both real and monetary influences on prices.

Theoretical aspects

To understand the causes and effects of price variation requires a generalised economic framework (Lange, 1944b). The following are some of the important aspects that need to be considered:

1. (i) The market structure needs to be specified. Different relationships are expected to hold under perfect competition, oligopoly and monopoly (Sylos–Labini, 1962).

2. […]