Rates of Innovations and Profits in the Long Wave

  • Alfred Kleinknecht
Conference paper

Abstract

The severe economic problems in most Western countries during the last decade have helped to reveal a decisive weakness in economic theorizing: none of the different schools of economic thought, whether Marxist or non-Marxist, have a satisfactory theory of long-term economic development. There is virtually no economic theory or paradigm which, beyond pure speculation, would allow any well founded economic forecast of what will happen to economic growth and employment in the next ten years or so. In judging the character of the present economic crisis, even the most basic questions are still open: Have some medium-term business cycles run out of their normal course since the mid-1970s, due to exogenous shocks and policy mistakes (end of the Bretton Woods system, oil price shock, budget deficits)? Will there be a return towards full employment and price stability once these policy mistakes are corrected and the shocks absorbed, as the McCracken report of the OECD (1977) puts it? Or do the low growth rates since the mid-1970s rather indicate a return to a “normal” long-term growth path once the postwar reconstruction boom had faded (reconstruction hypothesis)? Or, to sketch still another possible interpretation: can the economic problems of the last decade be taken as evidence that capitalism has reached the final stage of its life cycle, its last stage of decadence and stagnation? Are we experiencing the Final Crisis of Capitalism?

Keywords

Combustion Migration Depression Europe Petroleum 

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© Springer-Verlag Berlin Heidelberg 1987

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  • Alfred Kleinknecht

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