ABSTRACT
Secular growth characterizes a macroeconomy for which the ongoing rate of saving and investment exceeds the rate of capital depreciation. A change in the growth rate – or more generally – in the intertemporal pattern of consumable output may occur as a result of some change in the underlying economic realities. Advances in technology and additions to resource availabilities, as well as preference changes that favor future consumption over present consumption, impinge positively on the economy’s growth rate. Such parametric changes have a direct effect in one or more of the panels of our capital-based macroeconomic framework and have indirect effects throughout. These instances of change in the sustainable growth rate are offered as preliminary to our discussion of the unsustainable growth induced by policy actions of the monetary authority.
