From: Michael Perelman (michael@ECST.CSUCHICO.EDU)
Date: Mon Dec 20 2004 - 21:18:22 EST
I don't have time to answer in detail, but the empirical evidence is that replacement investment does take place more vigorously during downturns, when competitive pressure is strongest. I discussed this in my Keynes book. On Mon, Dec 20, 2004 at 05:53:57PM -0800, Rakesh Bhandari wrote: > At 1:36 PM -0500 12/20/04, Gerald_A_Levy@MSN.COM wrote: > > > Winternitz is arguing that in the boom demand may be strong enough > >> both to effect continously technical change as embodied in > >> accumulated capital goods and to keep running equipment that will > >> become outdated in the recessionary phase. > > > >Rakesh, > > > >Why will the constant fixed capital become outdated in the > >recessionary phase but not the expansionary phase of the cycle? > > It does, only less so. Bankruptcy, obsolescence are permanent > features. Capital is never in equilibrium. > > > > > >In other words, there doesn't have to be a global shortage of labor power > >for an international crisis to be triggered by the shortage of labor power > >in one or more major capitalist social formations. > > I wasn't contesting the theory as a matter of logic; it does not seem > to me empirically robust at the present time. > > > > > > >In solidarity, Jerry -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
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