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Adopting a sectoral perspective, this article is concerned with the pattern of economic growth in the late nineteenth-century Habsburg empire. The timing and extent of changes in machinery output and investment support the notion of a great depression in Austria after the 1873 stock market crash and match with the direction of capital flows. The post-1873 outflow of capital from Austria to Hungary, which was eventually reversed in the early 1890s, hampered industrial investment in the western part of the empire, and stimulated expansion in the eastern part. The evidence casts doubt on the revisionist view which postulates steady and uninterrupted growth of the Austrian economy between 1870 and 1913.