Recessions and the Skyscraper Curse

“One of the many odd incidents of history is, with seemingly only one exception, every time a record-breaking skyscraper is completed, the world economy falls into the depths of a recession.

This could easily be dismissed as one of the manifold coincidences that inevitably arise out of dataset as large and with so many players as all of modern history–if it were not for the work of Mark Thorton, economist and Senior Fellow at the Ludwig von Mises Institute. His new book, “The Skyscraper Curse” posits a causal theory that links the completion of sky-scraping megastructures to economic recession.”


Thornton begins with an important discussion of money creation and Richard Cantillon, writing: “… Richard Cantillon (1680s-1734?) [was] the first economic theorist and proto-Austrian economist …[he] showed how the interest rate and the money supply can create changes and distortions in the economy, a phenomenon now referred to as “Cantillon effects.”

Monetary inflation is affected by who gets the money and credit first and who gets it last. As fiat money is created by central banks, private banks are in a position to expand the amount of loans they make. The wealthy have established relationships with the banks, and they have the real estate and assets to provide collateral for the loans. Large, established companies and wealthy individuals are in favorable positions relative to small businesses and people with low or average incomes. The loans allow big companies and wealthy individuals to invest in capital goods during the boom phase of the business cycle. Central banks thereby create artificial inequality and poverty. This is the primary Cantillon effect of redistributing wealth.”  Richard Duke

[Cantillon above is pronounced: Can tion]

Why You Should Read Mark Thornton’s The Skyscraper Curse—By Richard Duke On Mises Wire