ABSTRACT
This chapter argues that economic life corresponds broadly to long waves of growth and stagnation. The underpinning of the upwave of any upwave thus lies in the development of new technologies, industries and forms of production, in addition to expanded trade links and developing markets. Cities and city regions have always been the key engines of economic development. This is because it is in cities primarily that innovation occurs and entrepreneurs try their luck. Cities also provide ready markets for trade in imported goods. China's newly prosperous middle classes are also now consumers of locally produced goods and services, but also imports such as Australian wine. As the cost of borrowing rises, consumers spend less and businesses experience slower growth, even stagnation and decline. Businesses begin to shed staff, small businesses in particular, but larger groups also begin to move production to lower labour cost countries, or simply to close down plants or offices.
