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of foreign markets for American products which made it
possible for oligopolies to escape the claustrophobic
conditions of a restricted home market. The newly
aquired habit of the concerns to spread out into the most
varied fields of activities also created new opportunities
for investment.
In Europe the factor of public and military spending was
also of great impottance in some countries in expanding
demandbut there was, on the continent at least, an additional
factor which stimulated private investment directly.
Europe had for one or another reason been out of tauch
with the technological development in the U.S. and .so
a backlog of imnovative opportunities had accumulated
which after the war became available in one lump, facilitated
by Marshall plan and technical assistence. Europe was
catching up technologically with the U.S. which means it
was going through at unusual speed a technical evolution
which had taken a much longer time to develop originally.
Productivity growth at that time was about twice as great
in Europe as in the U.S. It stands to reason that this
involved a very strong stimulus to investment activity.
On the supply side the barriers to ahexceptionally quick
growth were removed by the availability of labour from
agriculture ( in Germany also displaced persons ).
Thus an exceptional speed of development was made possible
by drawing on a reserve of know-how and of labour. This
process must have been exhausted long before the end of the
prosperity phase in the 70s, but in the meantime there had
develp^ped an automatic buoyancy, both in Europe and in U.S.