Skyscraper Index

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The Skyscraper Index is a theory that was developed in January 1999 by Andrew Lawrence, the scientific director of Dresdner Kleinwort Wasserstein . It is an insignificant modification of the theory developed in 1957 by Cyril Northcote Parkinson in Parkinson's Laws , Chapter 8, Plans and Plants, according to which the highest level of perfection in buildings is achieved when the institutions that reside in them are already in Are in decline.

In 2010 the economist Gunter Löffler published a discussion paper on the connection between stock exchange prices and the construction of skyscrapers in which he came to similar conclusions.

concept

The concept is based on the fact that the tallest buildings in the world were always built before times of economic decline. Business cycles and building of skyscrapers correlate in a way that the largest investments in skyscrapers are made when the top of the business cycle is already reached or is about to come.

While skyscrapers and skyscrapers are always seen as a sign of economic boom, Lawrence sees them as a sign of downturn. He uses skyscraper projects as indicators of economic decline.

Löffler explains the connection between financial crises and record-breaking buildings by stating that both are the consequences of too much optimism and thus too much willingness to take risks.

Emergence

Lawrence started developing the concept of the Skyscraper Index rather jokingly as it was inspired by the theme of a comedy show. He compared the historical data with investments in large-scale and record-breaking construction projects in the United States and discovered remarkable connections. The first interesting discovery was the 1907 panic. Shortly before, two major construction projects began in New York City, the Singer Building and the Metropolitan Life Tower , which were completed in 1908 and 1909.

The next crisis, Black Thursday 1929, was again preceded by record buildings: the construction of 40 Wall Street , the Chrysler Building and the Empire State Building . During the 1973 oil crisis and the 1973/74 stock market crash , the tallest buildings in the world, the Sears Tower and the World Trade Center , were opened. The last correlation that Lawrence mentions is the Petronas Towers and the 1997 Asian Crisis .

The theory was revived in 2005 when five new, major construction projects were tackled in Manhattan, none of which were the tallest buildings in the world.

The construction boom in Dubai with the Burj Khalifa , the completion of which after the onset of the financial crisis from 2007 onwards could only be secured by generous loans from the neighboring country, provides further evidence for this theory .

Counter arguments

Critics consider the model of the skyscraper index to be unreliable. For example, the recession of 1937 and the recession of the early 1980s were not preceded by any record construction.

Individual evidence

  1. ^ Andrew Lawrence: The Skyscraper Index: Faulty Towers . In: Dresdner Kleinwort Wasserstein Research (Ed.): Property Report. . January 15, 1999.
  2. ↑ Tower Building and Stock Market Returns (PDF; 118 kB), Gunter Löffler, September 2010 (English)
  3. ↑ Angela Göpfert: Record Buildings and Financial Crises: Skyscrapers as Bad Omen. In: tagesschau.de. January 3, 2020, accessed January 6, 2020 .

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