12 
with further depressive consequences, since excess capacity 
will discourage investment. 
Using the same assumptions it can be shown that the transition 
from a competitive to an oligopolistic regime, if it causes 
an increase in profit margins at given utilization, will lead 
to excess capacity, and hence to a secular decline of growth. 
1) 
G. Nardozzi who applied similar ideas to an analysis of the 
development of the Italian economy in the post-war decades, 
stresses quite rightly the role of new entrants in the 
competitive struggle (they are, of course, absent in the 
oligopolistic case). This is rather an improvement of my 
argument. (I overstressed the advantages of the large firm, 
based on large scale economies, and attributed more of a 
dynamic role to it than is justified on the basis of broader 
considerations). 
I noted also the possibility that oligopolies would be influenced 
-that 
not only by actual excess capacity, but'they have an as it were 
constitutional fear of it: That is, a transition to oligopoly 
would automatically lower the inducement to invest. 
This line of thinking seems to have been important for Nardozzi's 
analysis. 
1) Sviluppo a stagnazione della economia italiana 1951-1971. 
L'industria 1974.