In contrast with the first two cycles, the 1920's bull market ended with the fall from plateau. There was no obvious DG peak and the whole pattern of Kondratiev cycles in prices broke down. Kondratiev, working in the 1920's, predicted a deflationary depression using his cycle theory. The disappearance of deflation over the past 70 years is the result of stimulatory economic policy that began with the New Deal and continues to this day. Stimulatory policy falls into to two categories, fiscal and monetary.
Fiscal policy involves government expenditures, while monetary policy affects the money supply.
By running a deficit the government can put more money into the hands of consumers than it takes in taxes, which can increase the amount of money available for spending. The Federal Reserve can increase the amount of money in circulation by a variety of means. The actual price is usually different from the predicted value. We see the same pattern of Kondratiev peaks and troughs in the reduced price over the entire 200 year period as we saw in the raw price index before 1932. What this means is the same Kondratiev cycle is operative today as was operative in the 1920's, when Kondratiev first described it in detail.