Trend and Cycle

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Trend and Cycle

Author:: Steindl, Josef

Scope:: Typoskript, Konvolut aus zwei Versionen von "Trend and Cycle", teilweise identisch, nummeriert, handschriftliche Anmerkungen und Notizen, 10 Blätter und 9 Blätter

Year of publication:: 1988

Source material date:: [vermutlich um/vor 1988]

Language:: English

Description:: Trend, cycle, cycle problems, long run changes, utilisation, measurement of technical progress, technology and economic structure, excess capacity in the long run, Kalecki.

Note:: Versionen einer Reihe von Entwürfen zu "Trend and Cycle". Die letzte Version wurde post mortem veröffentlicht und vermutlich 1988 verfasst. - Beilage (63 Seiten): Industrial Output Section (Division of Research and Statistics): Capacity Utilization, Manufacturing, Mining, and Utlities and Industrial Materials January 1967-December 1984 with supplementary manufacturing data, January 1948-December 1966. Revised July 1985, Washington D.C.

Related work:: Steindl, Josef: Trend and Cycle. In: Mott, Tracy und Shapiro, Nina (Hrsg.): Rethinking Capitalist Development. Essays on the Economics of Josef Steindl. New York: Routledge 2004, S. 164-173

Topic:: Growth,cycle and stagnation

JEL Classification:: E11 [General Aggregative Models: Marxian, Sraffian, Kaleckian] E32 [Business Fluctuations, Cycles] E37 [Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications]

Shelfmark:: S/M.18.1

Access:: Free access

methods.Another influence can come from the side of labour. If the price of the product is constrained by foreign competition in an open market the mark-up may be subjected to squeezing by the action of unions or by scarcity of labour. The danger of appearance of excess capacity which we assume is almost always threatening accumulation arises generally the fact that technical progress tends to increase the mark-up and therefore shifts distribution in favour of profits. This at the same time tends to create excess capacity . The relation between a "normal" mark-up and a ’’normal” long run capacity utilisation which will be underlying the argument can be described as follows: It is supposed that with a normal (customary) long run utilisation the mark-up has to be just large enough to yield a profit rate (or rather rate of retained profits) which is sufficient to finance the given growth rate, taking into account borrowingj^to an extent which will not change the existing relative indebtedness. There is thus a ’’warranted” rate of retained profits which in turn is determined by a given growth rate - that is the rate of growth which has been ruling so far and which gives rise to the question whether it can continue and under which conditions its continuation is either assured or endangered. If the "natural” tendency of the system to produce a shift towards profits is counteracted by aggressive competition then there will be two results: There will be an increase in the real wage and the consequence will be that a certain number of producers - those with the most outdated methods and equipment - will be eliminated. This will be a factor which contributes,to the reduction in overcapacity. Second, owing to the shift to labour the effective demand will increase and that should in principle be a strong force making for the reestablishment of "normal” rates of utilisation. The second factor may be considered the major one,but the first factor will have a considerable role to play in the structural changes due to the maturity of old industries. The result of these considerations seems to indicate not only that distribution is the element which accounts for the difference in behaviour in short and long run, but also that the continuation of the growth process depends essentially on the action of certain correctives to the tendency of technical progress which tends to shift income towards profits; correctives,either in form of aggressive competition or in form of pressure from labour (in an open economy) will be necessary in order to prevent the appearance of continuing overcapacity which would frustrate the further accumulation. Thus distribution turns out to be a most important element in the explanation of the normal growth process. This does not mean that the essential role of the exogenous factor as it was described before,is in any way modified.

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