It's eight years since Carlota Perez published Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Only recently, however, has the book become better known and Perez herself somewhat feted for her analysis. There are two reasons for this. One is, of course, timing. There's nothing like a Great Crash for arousing interest in theories of the dynamics of capitalism, so Perez's book, like the late Hyman Minsky's Stabilizing and Unstable Economy, found its time. The other is that Edward Elgar finally cut the price – the reason I've only just read it is that it was prices so high even second hand copies were prohibitively expensive, even for a bibliophile.

Reading Technological Revolutions has been both interesting and odd. I'll start with the interesting. The book presents a 'long wave' or Kondratiev cycle view of dynamics, where successive waves of technological innovation drive the 50 or 60 year cycles. The first batch of chapters present a (verbal) model of five waves in capitalist industry, starting with the Industrial Revolution kicking off in Britain in the late 18th century. Each wave is broken down into two periods – 'installation' and 'deployment' – the first the introduction and early spread of new technologies, the second the adjustment of the wider economy and social institutions to the new technology. Each half in turn is divided into two sub-periods.

I've always been tatntalised by Kondratiev cycles – here's a diagram in one of my old notebooks, copied from I know not where in as I was on my book tour for Paradoxes of Prosperity.

There are two aspects of Perez's approach which distinguish it from other accounts I've read. One is her emphasis on what she terms the 'techno-economic paradigm', or in other words the institutional and organizational framework corresponding to a particular key technology such as steam or microchips. The other is her overlay of financial cycles onto technological and business cycles. At the present time, this is indeed an interesting approach.

But now onto the odd aspect of the book. Perez identifies firmly with 'heterodox' approaches to economics. I'd call myself mainstream but share some of the heterodox interests. As it happens, there is an entirely parallel and separate mainstream literature on the elements of Technological Revolutions, albeit not gathered together in the same kind of synoptic approach.

So for example, the 'techno-economic paradigm' is the same as what industrial economists would call an innovation or production system – Michael Best's The New Competitive Advantage is one example. Economic historians, notably Paul David but also Brad DeLong or Joel Mokyr in his Gifts of Athena, have detailed the way a technology's full impacts are not experienced until the social, institutional and cultural context have adapted. In growth theory, the idea of a general purpose technology which transforms – slowly – the whole of the economy is well established. Elhanan Helpman's edited volume General Purpose Technologies and Economic Growth set this out clearly. Many economists have looked at the process by which technologies spread through the economy, from Zvi Griliches' pioneering 1957 paper on the diffusion of hybrid corn onwards. Paul Geroski's The Evolution of New Markets is an accessible summary stuffed with examples.

Having absorbed this mainstream literature, I found Perez's book therefore interesting but essentially familiar, and lacking much of the applied detail contained in the extensive mainstream literature. It's clear from the absence of references to any of this work that she has followed a parallel and non-touching heteredox route.

Its most novel aspect to me was therefore the analysis of how finance interacts with technological innovation. Although the economic historians have highlighted the fact that hot new technologies lead to stockmarket booms and busts, as in the railway mania of the mid-19th century, Perez offers a more systematic argument about the phases of investment through a long technological cycle. The interaction between finance and the diffusion of innovation, and the wider economic and social context, has previously been overlooked.

In short, if you enjoy grand unified theories of capitalism and Kondratiev cycles, you'll enjoy reading this book. If you're unfamiliar with the large economics literature on technology, there will also be much of interest. But for me the later chapters on financial cycles are the freshest and also the timeliest part of the book.

One final note. The book has an essentially very upbeat message. For if Perez's categorization of long cycles is correct, then once we're out of the current crisis phase, the global capitalist economy is in for a golden age as the surge of micro-chip linked technologies become widespread. Fingers crossed that Kondratiev cycles work!