Full text: Distribution and Growth

<s^ytal'£>u C^i ' ^t -fits'll*%h>'VUj ^ 
“ 7 - t, ,, . »«►. cj 
w*;+*OA> <&*-< t&U* 4e* iH&d^Utj t- 
/ ' ^oj ///, focj, 
This means that the share of investment in GDP (y) (which is 
regarded here as a proxy for the growth rate) will depend on 
the profit margin \ , calculated on capacity output, and on 
' + 
utilization of capacity y/y . 
The main ideas are thus: Saving comes largely out of profits, 
or rather: For flexibility saving depends on the flexibility 
of profits, while other sources of saving are much less 
Further: The share of investment in GDP can be taken as a proxy 
for the growth rate, in other words, changes in capital coefficient 
will not be large or systematic. The capital coefficient is 
determined by the course of technical development. As a matter 
of speculation it may be guessed that in manufacturing one does 
not like capital coefficients above a certain value (except 
in basic metals) and methods which require them are not adopted, 
or only after the capital coefficient has been reduced by some 
device, such as large scale units. 
This theory, with some refinements, I used in Maturity and 
Stagnation (1952). In view of my special purpose I only treated 
the problems arising from declining growth i.e. the adaptation 
of a profit margin which is too high for the growth established. 
I propose now (1) to deal equally also with the other case of 
a rate of growth which is high in relation to the customary

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