state with plenty of unused reserves so that a self-accelerating movement 
leads to unsustainable growth. There is no reason to doubt these 
relations and their importance but there may be some doubt whether this 
chain reaction works quick enough to explain the pattern of the trade 
cycle, comparatively short as it is. I wonder why we do not appeal in 
this connection to the force of imitation which is so strong in the 
working of our society? If we do the boom gets the features of an 
epidemic which carries with it the movements of stocks, of investment 
activity, of consumers credit ( more generally, purchase of durable goods 
) and of bank credit (behaviour of the banks ). We can then understand 
how the multiplier works so quickly and that the chain reactions are 
telescoped into a relatively short time. To take account of this 
innovation it may not be necessary to change very much in the algebraic 
model of the cycle; all that has to be expressed is that the reaction of 
investment (in stocks or durables) to a stimulus is stronger and a little 
more stretched out - since it is a whole bunch of activities which will 
be stimulated. 
Another question which commands attention is that of the nature of the 
decumulation process which takes place in the depression. Kalecki assumed 
at first that it resulted from non-replacement which he measured by the 
depreciation not made good. But it is quite implausible that the amount 
of obsolescence in the cycle is really important; it must be considered 
that in practice most obsoolescence is technological, in other words 
equipment is eliminated only if it becomes useless because it can not 
compete any more with newer equipment. Thus the process of decumulation 
is inseparably intertwined with technological change: The equipment which 
was built up in the boom and the one which is withdrawn in the depression 
is technologically not the same, but there has been a replacement of old 
by new techniques. This would seem to imply also that there has been an 
increase in real wages, because it is that which explains the inviability 
of the old equipment. Again we see here that the trend and cycle are 
conceptually linked: The overcapacity of the depression could never be 
cleared away and room for new investment could never be created if there 
were not innovations which make some of the old equipment redundant. 
There is no doubt that the intuition of Schumpeter was right: That the 
cycles are the form in which long run growth and technological 
development is taking place. At the same time it must be said that the 
abstract and precise model of Kalecki was necessary, we could not miss 
it. The historical intuition of Schumpeter has grasped a very essential 
element but his explanation remains so vague that you can not come to 
grips with it. 
Another question concerns the long run character of investment and the 
apparent contradiction to its role in the cycle which is a short run 
phenomenon. Investment in fixed capital is made in view of its use in 
future years which usually stretch beyond the term of an ordinary boom. 
That is in most cases investment will not be decided mainly with a view 
to the situation in the cycle. Richard Goodwin has drawn the conclusion 
that the boom is dominated by investment in inventories. They may indeed 
play in many cases a decisive role in starting off the boom, but it seems 
hardly deniable that investment in fixed capital carries the boom along 
on its shoulders. The contradiction might perhaps be resolved if we 
consider separately the decision on an investment project in principle, 
and the choice of the timing of its execution; in other words it is not 
necessary to assume that an investment project once it has been approved 
must necessarily be carried out forthwith. The decision on the project as 
such is dependent on long run and technological considerations and 
procedes therefore independently of the business cycle. The execution on 
the other hand may have to wait for a convenient occasion. One possible 
consideration may be the abundant and cheap availability of credit. This 
would explain then the bunching of investment activities.