Sofarasthishappens，thecreditoperationsinquestionandtheuseoftheborrowedfundsmayincreaseordiminishtheoutputofindustryatlarge，andsomayaffecttheaggregateearningsofthebusinesscommunity。But，apartfromsuchincidentalshiftingofthemanagementofindustrytomorecompetentorlesscompetenthands，thiscompetitiveuseofborrowedfundshasnoaggregateeffectuponearningsorupontheindustrialoutput。
Thecurrentorreasonablerateofprofitsis，roughly，therateofprofitsatwhichbusinessmenarecontenttoemploytheactualcapitalwhichtheyhaveinhand。6*Ageneralresorttocreditextensionasanauxiliarytothecapitalinhandresults，onthewhole，inacompetitiveloweringoftherateofprofits，computedoncapitalpluscredit，tosuchapointaswouldnotbeattractivetoabusinessmanwhomustconfinehimselftotheemploymentofcapitalwithoutcreditextension。Onanaverage，itmaybesaid，theaggregateearningsoftheaggregatecapitalwithcreditextensionarebutslightlygreaterthantheaggregateearningsofthesamecapitalwithoutcreditextensionwouldbeintheabsenceofacompetitiveuseofcreditextension。Butundermodernconditionsbusinesscannotprofitablybedonebyanyoneofthecompetitorswithoutthecustomaryresorttocredit。
Withoutthecustomaryresorttocredita“reasonable“returncouldnotbeobtainedontheinvestment。
Totheextenttowhichthecompetitiverecoursetocreditisofthecharacterhereindicated-totheextenttowhichitisacompetitivebiddingforfundsbetweencompetentmanagers-itmaybesaidthat，takenintheaggregate，thefundssoaddedtobusinesscapitalrepresentnomaterialcapitalor“productiongoods。“Theyarebusinesscapital，only。theyswellthevolumeofbusiness，ascountedintermsofprice，etc。，buttheydonotdirectlyswellthevolumeofindustry，sincetheydonotaddtotheaggregatematerialapparatusofindustry，oralterthecharacteroftheprocessesemployed，orenhancethedegreeofefficiencywithwhichindustryismanaged。
The“buoyancy“whichaspeculativeinflationofvaluesgivestoindustrialbusinessmayindirectlyincreasethematerialoutputofindustrybyenhancingtheintensitywithwhichtheindustrialprocessiscarriedonundertheaddedstimulus；butapartfromthispsychologicaleffecttheexpansionofbusinesscapitalthroughcreditextensionhasnoaggregateindustrialeffect。Thissecondaryeffectofcreditinflationmaybeveryconsiderableandisalwayspresentinbrisktimes。Itiscommonlyobviousenoughtobeaccountedthechiefcharacteristicofaperiodof“prosperity。“Foratheoryofindustrythisindirecteffectofcreditinflationwouldbeitsmaincharacteristic，butforatheoryofbusinessitoccupiestheplaceofacorollaryonly。