Economic Growth, Capitalism and Unknown Economic Paradoxes

Stasys Girdzijauskas, Dalia Streimikiene and Andzela Mialik
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Stasys Girdzijauskas: Vilnius University, Kaunas Faculty of Humanities, Muitines g. 8, LT-44280, Kaunas, Lithuania
Dalia Streimikiene: Vilnius University, Kaunas Faculty of Humanities, Muitines g. 8, LT-44280, Kaunas, Lithuania
Andzela Mialik: Vilnius University, Kaunas Faculty of Humanities, Muitines g. 8, LT-44280, Kaunas, Lithuania

Sustainability, 2012, vol. 4, issue 11, 1-20

Abstract: The paper deals with failures of capitalism or free market and presents the results of economic analysis by applying a logistic capital growth model. The application of a logistic growth model for analysis of economic bubbles reveals the fundamental causes of bubble formation—economic paradoxes related with phenomena of saturated markets: the paradox of growing returnability and the paradoxes of debt and leverage trap. These paradoxes occur exclusively in the saturated markets and cause the majority of economic problems of recent days including overproduction, economic bubbles and cyclic economic development. Unfortunately, these paradoxes have not been taken into account when dealing with the current failures of capitalism. The aim of the paper is to apply logistic capital growth models for the analysis of economic paradoxes having direct impact on the capitalism failures such as economic bubbles, economic crisis and unstable economic growth. The analysis of economic paradoxes and their implication son failures of capitalism provided in the paper presents the new approach in developing policies aimed at increasing economic growth stability and overcoming failures of capitalism.

Keywords: failures of capitalism; economic paradoxes; market saturation; growing returnability; debt trap (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:4:y:2012:i:11:p:2818-2837:d:20938

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