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| Ben Grasso |
It was Andrew Lawrence, the inventor of
the skyscraper index, who pointed out that the building of the world’s
tallest buildings is a good proxy for dating the onset of major
economic downturns. His index has stood the test of time; the few times when it made an incorrect prediction can be adequately explained by exceptional circumstances,
such as the onset of world wars. It is now being put to the
test again, and we ignore its advice at our own peril.
In “Skyscrapers and Business Cycles” Mark Thornton
writes:
“The ability of the index to predict
economic collapse is surprising. For example, the Panic of 1907 was
presaged by the building of the Singer Building (completed in 1908)
and the Metropolitan Life Building (completed in 1909). The skyscraper
index also accurately predicted the Great Depression with the
completion of 40 Wall Tower in 1929, the Chrysler Building in 1930,
and the Empire State Building in 1931.”
