The mature stage of capitalist development: Models, signs and policy implications

Abstract

We investigate the possibility that capitalist economies – those that industrialized first and the whole OECD group – may be reaching the growth plateau naturally, in a similar way to other complex systems in nature. In the system model of autocatalytic growth we introduce endogenous and exogenous variables that provide negative feedbacks to material growth and push the economic system into the mature stage of development. Based on general developmental stages for dissipative systems, we identify variables that would uniquely mark the transition to maturity: p.c. energy consumption, GDP and energy consumption distribution, and sector composition of labor and GDP. Empirical findings suggest that the observed groups of economies may have terminated their historic phase of intensive economic growth and are entering the mature stage. This provides a tentative explanation of the observed slow-down of long-run rates of GDP growth in the G7 economies and in Western Europe.