Stagnation.

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Stagnation.: Fassung

Author:: Steindl, Josef

Scope:: Typoskript, 12 Blätter

Year of publication:: 1987

Language:: English

Description:: This article by Steindl gives a short overview on theories of stagnation in economics and was published in a slightley different version in the Palgrave Dictionary of Economics.

Note:: Entstehungsdatum erschlossen. - Zusatz zum Titel fingiert.

Related work:: Steindl, Josef: Stagnation. In: Eatwell, John; Milgate, Murray; Newman, Peter (Hrsg.): The New Palgrave. A Dictionary of Economics. London: Macmillan 1987

Topic:: Growth,cycle and stagnation

JEL Classification:: E32 [Business Fluctuations, Cycles]

Shelfmark:: S/M.39.1

Access:: Free access

6 The work of Baran (1957 ) and Baran-Sweezy ( 1966 ), written during the post-war period of prosperity, dealt extensively with the counteracting factors. They stressed in particular the importance of sales cost and of public spending but played down the effect of innovations on investment. Starting from a similar mixture of strands but more specifically from Kajbeckian economics Steindl ( 1952 ) asked what consequences the shift of capitalism from competition to oligopoly near the turn of the century might have had. He chose the U.S. because it seemed more nearly a closed and private system. Steindl saw the function of competition in the elimination or prevention of excess capacity. Excess capacity had two effects: It discouraged investment; and it increased competitive pressure since everybody wanted to gain room at the expense of his competitors. This could succeed ony in the long run by squeezing some of the capacity out of the market. The procedure involved a simultaneous squeezing of the profit margin ( measured at normal utilisation of capacity ). Restauration of a normal degree of utilisation had to go hand in hand with restauration of a normal profit margin. Here a link between distribution and the process of investment was established which so far had been missing: In Kalecki's system the utilisation of capacity played a purely passive role while here it was regarded as an important determinant of investment, independently of its influence on profits so that in two cases with the same rate of profit but with different utilisation the investment would be larger with the higher utilisation. The distribution theory implied in this mechanism of

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