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action. I shall consider now an additional idea which might 
carry us a tiny step further. 
Let us consider the effects of an investment. Ordinarily 
we distinguish two effects, one on effective demand, the other 
on output capacity. For the purposes of business cycle theory 
this is quite sufficient, but if we discuss long-term develop 
ment we must consider further possible effects. 
If an investment realises new technical possibilities, e.g. 
a new product, it may require a complementary development 
(example: the motor car in the course of time led to the 
development of new roads). 
An innovation may lead to further innovations in the same field: 
Black and white television was followed by colour television, 
etc. Again, an innovation in one field may throw up applications 
in other fields, so that it will be followed by other innovations. 
From these interrelations we may possibly get an endless chain 
of innovative investments. Moreover, each innovation produces, 
by way of diffusion, a series of further investments which, 
being mere imitations of the first, do not have the power of 
stimulating further innovation, except in so far as they 
broaden the basis for experience.