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4. For a single country a chronic tendency for relative 
wage cost to increase in relation to other countries 
might be a reason for tax favours to industry. For all 
industrial countries taken together this reason does not 
apply. 
It goes without saying that the restrictionist policy 
since 1974 and especially 1979 and 1980 has added to all 
these reasons for a weakening of the stimulus to invest 
a further and particularly strong one. Also the burden 
of the public debt has become vastly increased by the 
high interest policy. 
The list of causes does not necessarily suggest how one 
could undo them, but it gives perhaps food for thought. 
II. Just as budget deficits and taxation also inflation has 
started to be troublesome only after a time. In various 
countries there has been a fairly long period of full employ 
ment with moderate inflation rates - say of the order of 3 p.c. 
The theoretical reflection of this has been the structural 
theory of inflation which explains why a certain degree of 
inflation must necessarily accompany full employment (when wages 
are pulled up in industries with high productivity growth 
the wages in other industries follow so that the growth rate of