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Thursday, January 07, 2016

'How to Escape from the slow-Growth Doldrums'

I tried to construct a simple example to explain secular stagnation. I'd be interested to hear thoughts on what I might have gotten wrong (and right) in the explanation:

How to escape from the slow-growth doldrums, by Mark Thoma: More than six years after the Great Recession's end, economic growth in the U.S. remains lackluster. That's raising concerns among economists that the U.S. is entering a period known as "secular stagnation," an idea first proposed by Alvin Hansen in 1938 and recently revived by Larry Summers.
When an economy enters such a period, it's caught in an extended period of low economic growth. Summers believes the U.S. and other economies may be suffering from this ailment, though it's too soon to know for sure.
To understand the nature and cause of secular stagnation -- and solutions to it -- a simple example might help. ...

    Posted by on Thursday, January 7, 2016 at 08:58 AM in Economics | Permalink  Comments (115)


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