Construction of a theory of non-exponential growth and itsapplications

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In existing theories of economic growth, it is considered that sustained growth is possible only when quantity, quality, or variety increases exponentially. This study shows that sustained growth is in fact possible without the exponential increase of any variable if the following three conditions are satisfied : (i)new goods are introduced continually, (ii)the elasticity of marginal utility of consumer for each variety of good decreases with the amount of consumption of that good, and (iii)the price of each variety of goods declines over time.