ABSTRACT
Since the industrial revolution societies have been permanently confronted with huge challenges stemming from structural change and economic development. The emergence of new industries (Saviotti and Pyka, 2004) is intrinsically connected with severe frictional problems. Although the long-run prosperity of economies strongly depends on the capacity to introduce new technologies, in the short run, the obsolescence of competences and production capital in mature sectors leads to periods of economic turmoil characterized by high unemployment and low, sometimes even negative, economic growth rates. All industrial societies have introduced instruments to absorb at least partially the negative side effects of economic development, in particular instruments to cure insane developments in labour markets as well as social imbalances. With the help of these policy interventions the impact of economic crisis could not be completely eliminated. Nevertheless, from a long-run perspective, economic development went only in one direction, namely upwards, for more than two centuries – despite several extreme events like the Great Depression at the end of the 1920s.
