Structure and Agency in the Dynamics of Growth: A monetary macroeconomic equilibrium perspective on growth imperatives and stagnation

We consider explanations for the persistence of growth by exploring a
system-inherent growth imperative. Our analysis of the credit economy detects two axioms (liquidity preference, marginal propensity to save) and two key principles (investments create savings, maturity transformation) of a functioning credit economy. We choose a structure–agency perspective explaining growth dynamics as the interplay of microeconomic behaviour and aggregate system characteristics. We find that developed economies tend to stagnate at underemployment equilibrium. This implies a growth imperative in order to overcome stagnation. We conclude that microeconomic analyses need to account for macroeconomic structure. Further, we point to possibilities and limitations of different actors to mitigate and overcome the growth imperative.