EXPANSION AND CONTRACTION IN THE AMERICAN ECONOMY.

Economists have long discussed the role in general economic development of the rapid exploitation of innovations especially those requiring immense amounts of capital. Some enthusiasts in looking at the comparative prosperity of the decade of the 1920's have pointed to motor vehicles, the most obvious feature of that prosperity, as the main cause. Actually, investment directly occasioned by the development and growing use of motor vehicles, although very large in the aggregate, was not predominant in the total of new investment in the period of so-called "plateau of prosperity," 1923 to 1929, inclusive. Rather, the automotive development of the period was one of several which provided opportunities for large aggregates of new investment. The rapid developments held to be the driving force of capitalism are said to produce "maladjustments" or "distortions in the structure of production. The conclusions reached in the paper were that during the period 1929-37 the American economy was stagnant and probably slightly contracting relatively to the population.