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Economic Growth, Capitalism and Unknown Economic Paradoxes

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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)

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    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.

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    File URL: http://www.mdpi.com/2071-1050/4/11/2818/pdf
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    Bibliographic Info

    Article provided by MDPI, Open Access Journal in its journal Sustainability.

    Volume (Year): 4 (2012)
    Issue (Month): 11 (October)
    Pages: 2818-2837

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    Handle: RePEc:gam:jsusta:v:4:y:2012:i:11:p:2818-2837:d:20938

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    Web page: http://www.mdpi.com/

    Related research

    Keywords: failures of capitalism; economic paradoxes; market saturation; growing returnability; debt trap;

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    1. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, September.
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