ABSTRACT
Josef Steindl was an economic theorist who always paid close attention to the empirical relevance of his work. When writing about macroeconomic phenomena, he consistently acknowledged the difficult problem of explaining cyclical growth. Over time his approach to this issue changed. In Maturity and Stagnation in American Capitalism (1952), he developed a theory of self-sustaining growth that is based on what he termed an endogenous theory of investment. Using this investment theory, he was able to account for growth trends, while being forced to leave the explanation of cycles unresolved. In subsequent work, he modified his position on investment. The idea of endogenously generated investment was replaced by an exogenous theory, where unexplained technical change is seen as the source of growth. Technical change was also used to explain at least part of cyclical behavior, since innovations are characterized as shocks which have a positive bias.
