(2008). Essentially, this theoretical framework is
grounded in Veblen’s and Mitchell’s theories of the
business cycle. Veblen provides an analysis explaining a
recession according to the principles of increasing costs
of production and decreasing revenues, or profit
squeeze. In contrast, an economic expansion is
explained by increasing revenues and decreasing costs.
For an economic expansion (or prosperity), Veblen
suggests various causes for the reduction of the output
cost. Veblen (1923: 97) contends, a “ceaseless advance
of the mechanical technology has...the effect of lowering
the production cost of the necessary equipment, as also
the (physical) cost at which raw materials may be had.”