Stagnation theory in the light of recent history. (Fassung 1)

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Stagnation theory in the light of recent history. (Fassung 1)

Author:: Steindl, Josef

Scope:: Typoskript, 14 Blätter, kopiertes Exemplar mit handschriftlichen Anmerkungen

Year of publication:: 1974

Source material date:: [vermutlich um 1974]

Language:: English

Description:: How far are the ideas from "Maturity and Stagnation" relevant for other countries and for more recent periods.

Subject:: Industriestaaten Wirtschaftswachtsum Wirtschaftsentwicklung Stagnation

Related work:: Steindl, Josef: Maturity and Stagnation in American Capitalism. Oxford: Blackwell, 1952

Topic:: Growth,cycle and stagnation

JEL Classification:: O11 [Macroeconomic Analyses of Economic Development]

Shelfmark:: S/M.45.3

Access:: Free access

- 5 - also an alternative adjustment: Given that profit rates are "too high" (or "too low") in relation to the rate of growth, and the utilization is therefore abnormally low (high), there will be increased "cut throat" competition (reduced competition) with the effect of driving out excess capacity (retaining old capacity) and at the same time - in the process of doing so - reducing (increasing) the rate of profit. To put the matter more succinctly, excessive profits £ if 4* L vwj ■ ** t will induce expansion, but in this way also a competitive struggle which will reduce both profits and excess capacity while long-run deficiency of profits will lead to scarcity of capacity and to a relaxation of competition, thus increasing profits and the stimulus to expansion. My main point in Maturity & Stagnation was that this mechanism (in one direction) is obstructed by oligopoly which tends to lead to mark-ups which are too high in relation to the given rate of growth, and therefore to under utilization and further to retardation of growth. The symmetrically opposite case which I did not treat in Maturity & Stagnation will result if mark-ups are too low and utilization therefore excessively high - which In the extreme case will lead to inflation.

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