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Abstract: The paper is motivated by the assumption that low economic growth rates could be the normal case and not the exception in developed economies in the near and also in the far future. Several reasons imply limits on economic scale and thus limits to growth, e.g. resource scarcities, commodity price shocks, instability of financial markets, government debts, a decline in consumer confidence, or a managed attempt to reduce consumption. The intention of this paper is to identify possible reasons for a slow economic development in Austria and underpin these reasons with appropriate assumptions. The scenario is based on domestic and foreign low-growth causes. Foreign causes are a deteriorating balance of trade and increasing resource prices; domestic causes are consumer restraint of households and less immigration. The reasons identified were matched so that an average growth rate of GDP 0.55% per annum was achieved until 2025. Before we explain the domestic and foreign low-growth causes that are relevant for Austria and considered in the modelling analysis we describe the assumptions of the reference scenario that is needed to interpret the results of the low growth scenario.
Keywords: economic growth, macroeconomics, sustainability, sustainable economy, modelling.