the intuitive idea that the scale effect is of the same order of magnitued fpr the economy as a whole as for say a petrol refinery or other plant f>r which we know the value, ^'his is not entirely arbitrary because one can argue that all the external economies can really be reduced to internal scale effects in auxiliary production functions Niw to the trend paper. The reinvestment coefficient is really the coeffient a/1-c in Kaleckis euqatim of the cycle and equally in the equati n f r the trend (see the ry of economic dynamics equati n 25* and 52 page 146 ) The equation f>r the ftsii is and the equation f r the cycle is the same except that it lacks the last two terms ( the trend equ refers of course to moving averages), a is as it were a re-investment coefficiet in the narrower sense ~ indicating how great a prop rtion of its retained profit business one as long as only business savings ore considered, but if you apply it to the total savings of the economy it becomes very doubtful (see my paper on household saving!). Moreover, the coefficient is reduced if you consider also the adverse effect of capacity creatinn which is represented by c. The whole coefficient a/1-c must be below one, otherwise no cycle will materialise ( there is a wrong statement about that in my paper on p.11, top ^hich has been corrected in the meantime). Your remarks on the oil companies buying up firms - which presumably implies at least for the time being and for the ec n my as a wh le a kind of reducti n f indebtedness - illustrates the tendencies which run c unter to a reinvestment. In the end I c nfess that I probably at one or the other place used the terra reinvestment coefficient in the way in which you underst ood it i e simply relation 'f investment to that of the preceding peri d , taking the trend values. If the trend were explained by a difference equation >f the first order such as - k y t-i then there would be no difference between the two meanings. As to your second question about lag: No, the lag is that of diffusion, which may be quite long - until(practically) everybody has introduced the new method. That does not eaclude that you