Skyscraper Index

I keep hearing anecdotally from recent visitors to China/Dubai/BRIC about all the building cranes they see, stories about man made islands visible from space, and the contrarian in me reminds me of the 'Skyscraper Index'. Here is an interesting research abstract, by Mark Thornton, Senior Fellow at the Ludwig von Mises Institute:

Skyscrapers and Business Cycles

Abstract: The construction of skyscrapers that qualify as the “World’s Tallest Building”tends to coincide with major downturns in the economy. The Skyscraper Index, created by economist Andrew Lawrence shows a high level of correlation between skyscraper construction and the business cycle. Is this just a coincidence, or perhaps do skyscrapers cause business cycles? A theoretical foundation of “Cantillon Effects” for the skyscraper index is provided here showing how the basic components of skyscraper construction
such as technology are related to key theoretical concepts in economics such as the structure of production. The findings, empirical and theoretical, suggest that the business cycle theory of the Austrian school of economics has much to contribute to our
understanding of business cycles, particularly severe ones.

 

There were many more followers when it was called the "erection index." People apparently were confused.

 

Skyscraper "conception" takes place at market peaks. The erection of the buildings takes place during the ensuing bear market.

 

You Said Erection

 

Thanks nazz, now I'm going to have to go and look into this further. I may have missed something here.

 

The "climax" of the construction of the building takes place at the christening ceremony before tenants are allowed in.