CREDIT SQUEEZE EFFECTS
FALL IN CONSUMPTION AND INVESTMENT
The difficulty of the policy of the credit squeeze is clearly demonstrated by a contraction in the percentage increases of both consumption and investment in New Zealand in 1955-56. says W.R. writing in the latest economic bulletin of the Canterbury Chamber of Commerce.
The percentage increase in consumption in 1955-56 was 4.1 compared with 13.9 the previous year, and the percentage increase in investment 12.3 compared with 15.8. “Whereas the contraction of either one, consumption or investment, might have been sufficient to adjust the situation, there has been a tendency (inevitable in a private enterprise economy) for both the growth of consumption and of investment to slow down,” says the article. “The fall in consumption initiated by the ‘credit squeeze’ led to a fall in investment as well. It is to be hoped that the cautious policy pursued so far by the monetary and economic authorities in this country will avoid a cumulative contraction which would reduce future capacity to produce," the article says.
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Press, Volume XCIV, Issue 28159, 24 December 1956, Page 7
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172CREDIT SQUEEZE EFFECTS Press, Volume XCIV, Issue 28159, 24 December 1956, Page 7
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