Modern Growth and Credit Money

In neoclassical macroeconomic theory, monetary theory and growth theory are two independent branches. Within the framework of the two-stage growth model, this paper further constructs a dynamic “double helix” modern growth model, which integrates the issues of money and growth into a consistent framework. Under this framework, the economy is regarded as a set of business models. All business models can be divided into two stages: capital growth and operational growth. Modern growth connects the two stages through credit, forming a “double helix” growth cycle. Obtaining capital by discounting future income is the most important feature of modern growth which is different from traditional growth. Money based on credit plays a central role in modern growth.