The Capacity Problem

John Grieve Smith

Chapter 9 in Full Employment: A Pledge Betrayed, 1997, pp 168-179 from Palgrave Macmillan

Abstract: Abstract One of the problems of restoring full employment today is the effect on industrial capacity of so many years of heavy unemployment. In the 1980s levels of capacity throughout the EU were eroded by closures and inhibitions on investment in additional capacity. As a result, we no longer have adequate capacity to employ the potential workforce fully, even if demand were adequate. Capacity will need to be built up in line with increasing demand, if unemployment is to be reduced without pressure on capacity and consequent price increases stimulating inflation en route. The problem is, however, that it is easier to reduce capacity by depressing demand than to increase it by expanding demand. The desire to avoid inflation makes it impractical to increase capacity simply by expanding demand to the point where there are shortages and then waiting for capacity to expand to satisfy them.

Keywords: Venture Capital; Technical Change; Capacity Utilisation; Full Employment; Risk Capital (search for similar items in EconPapers)
Date: 1997
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37238-2_9

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230372382

DOI: 10.1057/9780230372382_9

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().