Barry Eichengreen & Secular Stagnation

VoxEu has an e-book discussing Larry Summer´s “invention”: “Secular Stagnation”. In his essay, BE concludes:

So is there a secular stagnation problem? Yes, there are reasons to worry that the US’s growth rate over the next 10 or 20 years will disappoint by the standards of the 20th century. But this is not inevitable. It will not be because all the great inventions have been made or because there is a dearth of attractive investment projects and an overabundance of savings.

If the US experiences secular stagnation, the condition will be self-inflicted. It will reflect the country’s failure to address its infrastructure, education and training needs. It will reflect its failure to take steps to repair the damage caused by the Great Recession and support aggregate demand in an effort to bring the long-term unemployed back into the labour market. These are concrete policy problems with concrete policy solutions. It is important not to accept secular stagnation, but instead to take steps to avoid it.

David Beckworth, Ryan Avent and I mostly agree with Eichengreen.

One thought on “Barry Eichengreen & Secular Stagnation

  1. If you are old you remember the 1970 s and the defeatism. Crime, inflation,the Great Recession has brought to the fore those same sentiments.

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