The Solar Cycle and Economic Cycles

According to NASA, the sun's current cycle, known as Solar Cycle 24, is expected to reach its peak in early- to mid-2013. Powerful solar flares caused by a change in the sun’s activity and appearance may have a significant effect on Earth causing long-lasting radiation storms in the atmosphere - disrupting electrical infrastructure and temporarily rendering cell phones useless. But can they cause economic disturbances? According to US economist Irvin Fisher, the first celebrity economist and once known as the “great mathematical economist” it can.

Fisher, largely known for his debt deflation theory, speculated that there is a connection between economic crises and sunspots. His work, cut short by his death, included a major treatise on economics containing data tables on the relation of the 11-year sunspot cycles, known as the solar cycle and recurring economic crises.

He theorized that during weak sunspot cycles, called solar minimums winters are colder and dryer, and summers are shorter than in strong sunspot cycles called solar maximums. This affects agricultural output thereby reducing food supplies and driving prices higher. The decline in discretionary income can lead the economy into recession. Can this be possible?

Indeed, stock market setbacks in the past two years have coincided with spikes in solar activity.

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