Veröffentlicht als: Beitrag zur IMK-Konferenz ‘The State of Economics after the Crisis’, Berlin, 2012.

Autoren: Christian Kimmich und Ferdinand Wenzlaff


We explore the stability conditions of an eventual zero growth economy, irrespective of the desire from sustainability viewpoints or the likeliness and explanations for this to eventuate. If advanced economies will in fact soon be characterized by the absence of growth, then the question whether they will remain stable, and if not, how they can be adapted to zero growth conditions becomes vital. We briefly review the Golden Rule theorem, in its original form postulating an optimal growth path at an interest rate level equal to the growth rate. We address the question if a low growth or stationary economy can be stable at an interest rate above the growth rate , as proposed by the a modified Golden Rule argument. The normative theorem is then supplemented by the positive concept of the interest-rate-growth-differential which was developed in the context of state debt dynamics. We outline a monetary Keynesian framework of credit, portfolio decision, and a hierarchy of asset over commodity markets with liquidity preference and term structure, which can explain the persistence of a positive differential and leads to our deduction of a central bank dilemma of either provoking stagnation or boom-bust cycles. We find support in the recent literature and experience of discount rate policy at the nominal zero bound. Unlike recent discussions calculating the risk of a deflationary spiral, however, we propose a central bank dilemma of the long run for low growth economies. This dilemma is highly certain to be encountered, and unless surmounted, makes a stable stationary equilibrium impossible.