Demand Iteration Speed as a Driver of Economic Growth in Saturated Economies

HE, XIULEI (2026): Demand Iteration Speed as a Driver of Economic Growth in Saturated Economies.

Abstract

When population growth stalls and per capita consumption of physical goods approaches saturation, traditional supply-side growth models fail to explain the persistent slowdown in advanced economies. This paper introduces the concept of demand iteration speed, defined as the frequency with which a given product or service is repurchased per unit time, and embeds it into a national-accounting decomposition of consumption expenditure. The growth rate of consumption is shown to equal the sum of population growth, growth in per-transaction consumption volume, and growth in average iteration speed. This decomposition reveals that in the post-growth era, iteration speed becomes the decisive structural variable for economic growth, providing a unified lens to interpret the historical succession of growth engines from durable infrastructure to high-frequency digital services. We apply this framework to Hong Kong, a mature small open economy, and identify four high-iteration sectors that can support its long-term growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: consumption frequency, demand iteration, economic growth, structural change, post-growth economy, Hong Kong
• Subjects: A - General Economics and Teaching > A1 - General Economics

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