On Sustaining Economic Growth Over The Long Term

This paper investigates the problem of sustaining economic growth, viewed from the perspective of how growth is affected by government policy choices as well as by the nature of government. Special attention is given to the role of rent seeking in limiting growth. Three types of economic growth are identified from the standpoint of the sources of growth, and each type is identified with an element of the aggregate production function. While any of the three types may persist for a time under the right circumstances, it is argued that only one of these can be permanently sustained.