Skyscraper Index

The Skyscraper Index is a theory proposed in January 1999 by Andrew Lawrence, a property analyst at Dresdner Kleinwort Wasserstein, holding that construction of the tallest buildings in the world tends to peak on the eve of economic downturns. The theory holds that falling interest rates at the start of an economic boom raise land prices and prompt firms to expand, creating demand for larger office space, while the same low rates enable the construction techniques needed to break height records, so both pressures intensify together just as growth is exhausted and a recession approaches. Lawrence traced the pattern through cases including the Singer Building and the Metropolitan Life Insurance Company Tower before the 1907 panic, the Empire State Building and Chrysler Building before the 1929 crash, and the Petronas Twin Towers after the 1997 Asian financial crisis, and an application of the model by economist Mark Thornton was reported to have predicted the Great Recession in August 2007, though later empirical research by Barr, Mizrach, and Mundra in 2015 found that building height does not reliably predict recessions, even though GDP growth does correlate with taller buildings. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/