What specifically do you mean by “space capacity”?
You have to remember prices are a ratio. When you look at something in terms of dollars, you are comparing the value of the object, to the value of the dollar. And the objective prices based on those valuations are determined by supply and demand. In general, the greater the supply of something, the less valuable it is. And as the supply increases, ceteris paribus, price will decrease. Have a look at these two videos. They may prove very helpful…
Also, this thread was just started yesterday: What is Inflation? – Please critique
Why do you assume this?
Here is where defining your terms is important if you want to get a real answer. What exactly do you consider “growth”? And what exactly is a recession? For some, “economic growth” is simply a higher GDP. For others, GDP is meaningless. If you mean increased prosperity and a higher standard of living, you first have to understand that that comes from increased productivity. And increased productivity comes from capital accumulation and free trade (and the resulting division of labor). This does not need “encouragement”. People are always interested in making a profit, and they can be counted on to act in their own self-interest. There is nothing the government can do to help this process. It can only interrupt, hinder, mislead and ultimately cause waste.