Developments in my business cycles and sustainable capitalism theory.
I have discovered there are two kinds of growth, which I call Endogenous Decreasing Growth and Exogenous Increasing Growth.
The first is the growth created by profits in a company. When a company receives a profit, it divides it into wealth and expenditures. These expenditures are divided as well into new profits and new wages because all the economic expenditure is reduced to wages and profits. Taking this into account, when a profit creates new wages it increases the demand in a variable always below 1 because of the division into profit and wages. This new demand increases again the profits below 1 so the growth is decreasing.
The Exogenous Increasing Growth is the common growth of the economy by creating new companies with savings and taking credits to increase production and production techniques.
In my theory of sustainable capitalism the steady state is not a problem because the Endogenous Decreasing Growth tends to 0 and there is not a continuous demand growth that leads to production shortage. Therefore, there exists a steady state of maximum production without negative growth due to business cycles.
Ryan McConnell.
