Hopes ran high as the economy began to turn around in the last quarter of 1975. The rosy expectations of a vigorous recovery, however, did not last long. Although at first the economic advance seemed to resemble the strong upswings of the cycles of the past 25 years, beginning in the summer of 1976 it became apparent that the recovery was quickly losing momentum. Moreover, the slowdown and the persistence of high rates of unemployment were not confined to the United States but characterized almost all advanced capitalist countries. This was bad enough. But what really began to worry the more serious business analysts was the weakness of capital investment, since sustained recovery depends on a healthy advance in capital accumulation.
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