Full text: Stagnation.

A. Hansen ( 1938, 1941 ) starts from a contemplation of 
the long secular growth process in the U.S. which reached 
from the civil war to the great depression. There was, 
he explains, extensive growth in the form of an increase 
of population and an expansion of the economy into 
undeveloped territory in the west of the U.S.: in addi tion 
the capital-intensive infrastructure of the economy was 
built up during this time ( transport, communications,power ). 
All this involved high rates of investment with the 
consequence that the economy was proceeding at full steam. 
The extensive growth facilitated also intensive 
growth by which he means growth of consumption per head 
which involves innovation, new industries, growing productivity 
and cheapening of consumption goods. The extensive growth 
had also favored competition whereas for a stagnating 
industry it is difficult to tolerate competition. The 
consequence of the decline in competition was less 
innovation and a price policy of corporations not 
favorable to the expansion of the market. 
The decisive reason why the economy had become"mature" 
lay in the cessation of extensive growth and the 
completion of the capital-intensive infrastructure. From 
this and the difficulty of replacing extensive by intensive 
growth followed the decline of investment opportunities. 
The resulting gap in investment could only be filled, 
according to Haasen, by public investment, the provision 
of "utility creating assets."

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