Full text: From Stagnation in the 30s to Slow Growth in the 70s.

The great disarray. 
Surprising as the preceding prosperity had appeared 
the change of events in the 1970s was even less expected 
and caused a great deal of disorientation among the 
forecasters. As I said already I do not think that my 
original maturity explanation of the previous stagnation 
could at all be applied directly to the new development. 
The reasons can be seen from what I have just been saying 
about the conditions of the labour market and about 
international competition, both of which woudl make it 
unlikely that oligopolies should have been able to 
increase their " mark-up" in the period of high employment 
( the situation was different in the later period of 
unemployment especially in the crisis of the 80s ) . 
There is.however an alternative version^ of my stagnation 
theory which is also mentioned in my book. It says that 
oligopolistic concerns, knowing as they do that excess 
capacity in their market is very difficult to remove 
and constitutes a major embarassment, will be much more 
reluctant to expand capacity than firms under competitive 
conditions. This conskferation would still apply in 
post-war conditions , when considerable concentration of 
industry has been going on, even though, as already said, 
the oligopolistic claustrophibia was somewhat lessend 
by the possibility to extend production by direct investment 
in other countries.

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