General Theory of Structural Constraints: Investment Trap, Demand-Constrained Growth, and Regime Shifts in Monetary Policy Transmission

This paper presents a diagnostic theory that interprets a phenomenon observed in advanced economies—monetary easing and standard macroeconomic policies no longer generating sustained growth, even as they are accompanied by improvements in employment—not as a "failure of policy management" or a temporary demand shortfall, but as the structural depletion of investment outlets. As its core concepts, this paper introduces the structural frontier coefficient Φ, which represents the latent constraint determined by demographics, the institutional environment, and capital structure, and the critical threshold θ, at which policy effects undergo a qualitative shift. It further presents the "demand-constrained growth hypothesis" as the mechanism through which the structural frontier becomes constraining as the economy matures. The paper divides demand-side constraints into three types of goods—time-constrained goods, goods with strong ownership constraints, and goods with weak ownership constraints and multiple ownership—and organizes demand displacement and qualitative-improvement constraints as cross-cutting constraints superimposed on them. In an economy whose room for quantitative expansion has shrunk, the center of growth shifts to qualitative improvement; however, as the quality frontier is approached, the marginal cost of improvement rises while marginal utility and the scope for price pass-through may decline, so that technological progress may diverge from growth in sales and GDP. In the region Φ > θ, Solow-type growth theory and New Keynesian transmission may, by and large, function effectively, whereas in the region Φ ≤ θ, the spillover of monetary easing to real investment and sustained growth weakens, and easing tends instead to spill over into alternative channels such as asset prices, fund retention, and external capital movements. On the other hand, because the sensitivity of the employment channel to Φ is relatively lower than that of the growth channel, employment responses may remain relatively intact even in the region Φ ≤ θ. This asymmetry of the dual channels explains the simultaneous occurrence of employment improvement and growth stagnation. Under the definitional constraint that Φ is not back-calculated from outcome variables, this paper presents a two-layer diagnostic identification procedure. The structural state is diagnosed from the component-wise directions (structural signature) of the ordinal scale Φ̂, which is constructed without using outcome variables, and from the binding constraint; the policy transmission state is classified separately by the responses of the growth and alternative channels to identified monetary policy shocks (employment responses are checked as an auxiliary diagnosis); the two are then compared, with the estimate a of the realized investment ratio α, the cost-push coefficient κ, and other measures reported alongside as auxiliary findings. Furthermore, under the hypothesis that in mature, constrained regimes the elasticity of substitution declines and the dominant bottleneck determines the viability of investment, the paper positions the min approximation not as a predictive function but as a diagnostic limit. This record contains the English translation (PDF) and the Japanese original (PDF) of the paper「構造的制約に関する一般理論」.