ABSTRACTFollowing an analysis of the relation between a standard Steindlian model of stagnation and Steindl’s own analysis, we modify the standard model by introducing endogenous changes in the mark‐up and a reformulation of the investment function. These extensions, which address significant weaknesses of the standard model, find support in Steindl’s writing and leave intact some of Steindl’s key results. In a further extension, we add a labour market and analyse the stabilizing influence of a Marxian reserve‐army mechanism. The implications of the extended model for the effects of increased oligopolization are largely in line with Steindl’s predictions.