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

compressed between high fixed cost and low utilization, 
tend to increase their mark-up. If they do so they depress 
the level of effective demand and impair the chances of 
new innovative industries which would be the only ones 
to lead the economy out of the impasse. 
It is true that this depressive effects of an increase 
in mark-up are to-day in an open economy with large 
budgets rather milder than in the closed economy I pre 
supposed in Maturity & Stagnation because part of the 
pressure will be absorbed by an increase in budget deficit 
and in the foreign balance, and only the remainder will 
reduce the income stream of industry. 
The tendencies to a hardening of the economic structures, 
of which excess capacity is a symptom, make it more 
difficult to avoid a deepening of the long-term depressive 
tendency which started in the 70'ies.

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