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producer price index (E3)<br />US price index of commodities calculated by the Bureau of Labor Statistics; published since 1890. It uses sellers' prices by direct sale, or through an organized
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new industrial state (PO)<br />GALBRAITH's term for the modern economy which is dominated by a 'technostructure' of large firms dedicated to stable production and the creation of wants so that there is no deficiency of demand for their products. He argues that the planning system used can be practised by both CAPITALIST and SOCIALIST ECONOMIES.<br /><em>Reference</em><br />Galbraith, LK. (1967) The New Industrial State, London: Hamish Hamilton; Boston, MA: Houghton Mifflin.
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crisis (E3)<br />In Marxian economics, a phase of the TRADE CYCLE which is the upper turning point where an economy turns down from a boom to a recession. Marx believed that such crises were inevitable under CAPITALISM and would occur every ten years. A crisis could occur for two reasons. The preceding increase in employment pushes up wages and reduces the rate of profit below the normal level, cutting back capital accumulation. Also, producers who are slow to innovate have higher costs and may go bankrupt and cause a collapse of firms throughout the economy. Crises, according to Marxists, are inevitable under capitalism because of its continual capital accumulation without the co-ordination of investment decision making which planning would achieve <br /><em>Reference</em><br />Sweezy, P.M. (1942) The Theory of Capitalist Development: Principles of Marxian Political Economy, chs 8-10, New York: Oxford University Press; London: D. Dobson.
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