Prosperity and Depression.pdf

CHAPTER IITHE TURNING-POINTS.CRISIS AND REVIVAL§ I. INTRODUCTIONIn the preceding sections, we have discussed theThe problem. reasons why our economic system is subject tocumulative processes of expansion and contraction.We have shown why, once started, such processes are cumulativeand self-reinforcing. The question now arises how they can bestarted, how they actually or usually are started, and how they canbe, and usually or actually are, brought to an end.The problem falls into two parts.A. How can an expansion be, and how is it in the normalcourse of events, brought to an end? Why does it not go onindefinitely? Why does it not lead up to a position of· stableequilibrium instead of being always followed by a more. or lesssevere contraction? The problem is closely connected-it isindeed almost identical-with the problem of how a contractionprocess is started. We therefore call it the problem of the upperturning-point or crisis.!B. How can a contraction be terminated, and how is it usuallyreversed? The problem is identical with that of the initiatingcauses of the expansion. We call it therefore the problem of thelower turning-point.or revival.1 See remarks on pages 257 and 258.