The seventh annual report of the Organization for European Economic Cooperation (OEEC), subtided “Economic Expansion and its Problems”, was made public February 1956. During 1955, the report stated, the economic expansion characteristic of 1953 and 1954 had continued; production had reached record heights, and it appeared that the gain in total output for 1955 had exceeded the rise of five percent recorded for 1953 and 1954. Higher production had allowed a fuller realization of the basic objectives of the policies of the member governments: high levels of employment had been reached, investment needed for economic growth had increased, and consumers had enjoyed a substantially larger amount of goods and services. However, according to the report a danger to the prosperity had arisen during 1955; the threat consisted in the possibility that an excessive growth of demand might turn the expansion into a boom, that a boom would entail price and production distortions as well as balance of payments difficulties, and that such inflationary excesses would disrupt the course of economic progress. In the view of the report, it was not yet clear that the threat to economic balance had been removed by dampening measures taken by governments. There were many signs indicating the strain that demand was putting on productive resources: production was pressing on capacity in most industries, with tight market situations developing, the demand for labor had taken up all the slack in unemployment, sensitive price indicators had moved up considerably, and in some countries, there had been significant increases in the general level of prices to consumers, while home demand had advanced somewhat more rapidly than production, leading to a reduction of the current balance of payments surplus or to a deficit.