A Theory of Value Growth

Classical growth theory places physical productivity at the center of economic growth. In modern service-based economies, however, growth increasingly means creating higher-valued products rather than increasing output quantities. This paper develops a theory of value growth based on a socially and institutionally sustained value scale. The framework unifies value creation, finance, and distribution and offers an account of major patterns in US economic history. The proposed framework is intended as a new approach to macroeconomic analysis and policy making.