Secular Stagnation: Facts, Causes, and Cures—Analyzing the Post-2008 Era of Low Growth and Low Interest Rates
Author(s): Archana Pandey
Publication #: 2605021
Date of Publication: 10.06.2020
Country: India
Pages: 1-10
Published In: Volume 6 Issue 3 June-2020
Abstract
The period following the global financial crisis of 2008 has seen a trend of very slow economic growth, low inflation rates, poor investments, and low real interest rates around the world. These phenomena have brought about the idea of secular stagnation, which was first coined by Alvin Hansen in the late 1930s and then again in modern economics by Lawrence Summers. This paper analyses the empirical evidence behind the idea of secular stagnation, explains various alternative theories as to why demand is weak in such an environment, and describes possible solutions proposed by academics before 2018. The paper shows that secular stagnation is a product of structural changes in demographic factors, productivity rates, income inequality, and savings rates globally.
Keywords: secular stagnation, low interest rates, post-2008 economy, productivity slowdown, macroeconomic policy.
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