Toward a Macro Framework for Economic Dynamics: The Capital Without Growth Puzzle

AbstractIn this paper, economic development is understood not as a linear result of capital accumulation, technological progress, or institutional change—whether taken separately or in simple combination. It is treated instead as a process through which independent economic cycles undertaken by different actors become linked into a reproducible multilayer structure within a changing institutional environment. As that environment evolves, it can densify the space of economic action, transforming isolated cycles into interconnected sequences in which the result achieved by one actor becomes a condition for the launch, continuation, or lower cost of another actor’s new cycle. It is precisely here that the multiplicative effect of growth emerges: the economy expands not only through the volume of resources, but through the density, transferability, and reproducibility of the links between actions. The paper offers a retrospective view of economic dynamics—from pre-exchange forms of organization to contemporary post-industrial society. It advances the argument that historical periods of accelerated growth were driven not only by capital accumulation, market expansion, technological shifts, and institutional deepening as such, but also by a growing capacity of the environment to couple, retain, and reproduce linked cycles across actors and levels of economic activity. The current slowdown of economic growth amid the continued expansion of liquidity is interpreted as a condition in which coordination and alignment frictions between layers increase, while the reproducibility of overall economic motion weakens. To formalize this problem, the paper introduces the E–F–G operator architecture, within which economic dynamics are described through the interaction of the action operator (E), the operator that transfers results through time and selects among them (F), and the environmental operator (G), which determines the possibility of result consolidation, inter-cyclical connectedness, and agents’ post-profit behavior. The paper further introduces the proxy coefficient T2CAC, which captures the structural cost of traversing the full economic loop. Taken together, these instruments provide a language for describing a situation in which capital-rich systems increasingly confront not a shortage of resources, but a shortage of stable, transferable, and reproducible economic growth. Associated replication materials, including processed datasets, tables, and reproduction assets, are archived separately on Zenodo.