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Sustainable Growth Rate

   Also found in: Acronyms, Wikipedia 0.01 sec.
Sustainable growth rate
Maximum rate of growth a firm can sustain without increasing financial leverage.

Sustainable Growth Rate
The amount that a company or economy can grow without having to increase borrowing. A sustainable growth rate is desirable because it satisfies the needs of the company or economy without increasing its fixed costs (in this case, borrowing costs), which can create significant problems if the growth slows or begins to decline.


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The proposal also includes increased pay for primary care physicians, decreased pay for some specialists, and a potential way to get rid of the sustainable growth rate formula.
This is a crucial level psychologically because over time gover nment bonds tend to have a yield similar to the nominal growth in the economy (4-5% in the UK, assuming a sustainable growth rate of 2-2'% and a similar number for inflation).
It's important to note that while all business cycles are inherently different, they typically share a common pattern: They begin with a recession period in which GDP growth is negative, move into a recovery period in which GDP growth ramps up above potential, and end with an expansion period in which growth settles back down to a more sustainable growth rate.
 
 
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