Policies of Stimulating Private Investment

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Policies of Stimulating Private Investment

Author:: Steindl, Josef

Scope:: Typoskript, 6 Blätter; mit handschriftlichen Anmerkungen und Anstreichungen.

Year of publication:: ohne Datum

Language:: English

Topic:: Firm and market structure

JEL Classification:: D43 [Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection]

Shelfmark:: S/M.45.1

DOI:: https://doi.org/10.48671/nls.js.AC14446075

3 As already mentioned the possibility of investment without additional capacity must be granted. It involves the premature retirement of an existing equipment and its replacement by a technically superior vintage. Now this also implies a shortening of the lifetime or else it means reducing the chance of future investment. It seems plausible that there are limits to this policy. If a lot of equipmeent has been replaced by brand new vintages this will for a time make it much more difficult to decide on further innovations i.e replacemt by newer vintages. The life time cannot be reduced continuously and the decision to scraj^ and replace becomes more and more difficult. ..ve in fact the replacemt of old by new vintages has played a very great role in post-war history of Europe, but it is also plausible that this movement must gradually have lost force and that it faded out. There remained then only the more difficult path of increasing capacity which, as argued above, with great probability pushed the investor into the quest for foreign markets, using for this purpose an aggressive price policy which was made pcysible in many cases only by the write offs granted by the tax laws. We notice in fact in most countries that in the course of the 60s and early 70s the profit margins ( even when corrected for the effects of underutilisation ) gradually decreased. Significantly, there was a growing discrepancy between the development of profits before and profits after taxes, which seems to indicate that firms used the tax allowances

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