Bis dilemma. The most radical WOULD be that the cycle
is created not by the instability of fixed capital investment
but by that of the inventory accumulation. This has been
the path choosen by Goodwin in his paper The Trend and the
, N to-
Cycle (Goodwin 1982 pj 16 ) /Where he b4se-s himself -on _
empirical work by Abramovitz which showed the great extent
of fluctualtons in inve ntory accumulation. Of course,
Goodwin cannot fail to recognise .big. fluctuations in fixed
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investment, but he regards these as induced by the inventory
accumulation.
Goodwin's paper has led me to the following idea:
It is reasonable to think that much of fixed invesetment
is planned, projected and prepared with a long run perspective
^ .
•v q.ite independently of the cyclical conditions. It is only
the timing of the ultimate ralisation of the project which
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is (in many cases at le-ist) synchronised with the cycle:
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The investment projects are not necessarily planned with a view
to immediate realisation, but they may be kept in store
for some time, and the time when they are taken out and
realised is often the beginning recovery, when the atmosphere
prevailing
of-optimism infects the planner and overcomes his hesitations
. X C'ila.-fc
(Hisbehaviour wi±3r-ire rational if ther
e are complementary
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developments of other firms which help his own project,
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f In paaci^it is irrational, because there are disadvantages
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in the hectic conditions of a boom,. The assuapti-an—is, however,
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that the element of imitation or stimulus of general attitudes
plg^s a very strong role in social behaviour.
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