Discussing Secular Stagnation: A case for freeing good ideas from theoretical constraints?

Bucchianico, Stefano Di

doi:10.1016/j.strueco.2020.06.002

Cited by 16 publications

(8 citation statements)

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“…Rather, it represents the return back to the average growth rates performed before the Golden Age period 1950-1972. It is apt to talk about Secular Stagnation in terms of labour and multifactor productivity growth, since their decline is greater than any previous shortfall. My findings cast some doubt on Summers' hypothesis of negative natural rates, which suffers from theoretical inconsistencies as suggested by Di Bucchianico (2020) and Palley (2019). In contrast, a careful analysis of data offers some evidence supporting to Gordon (2014Gordon ( , 2015 and Hein (2015Hein ( , 2016's Secular Stagnation hypotheses, among others.…”

Section: Introductionmentioning

confidence: 55%

“…According to Summers, and regardless of any Zero Lower Bound influence, the entrepreneurs adopt very high capital-labour ratio techniques that let economy reach a equilibrium position in correspondence of a negative marginal product for capital. Di Bucchianico (2020) questions the formal existence of a negative marginal product of capital through the adoption of an aggregate production function of the type:…”

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confidence: 99%

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Does the Secular Stagnation hypothesis match the data? Evidence from the USA

Borsato¹

2023

Journal of Post Keynesian Economics

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The paper adds to the debate around Secular Stagnation in four ways. First, considering US historical data since 1870, the use of the term "Secular Stagnation" in the literature is misleading, since it should concern more long runs. Second, the slow growth in real GDP per capita experienced in more recent times represents a return to what US experienced before 1950. Third, we can speak about Secular Stagnation in terms of labour and multifactor productivity growth: their decline since the 1970s is not comparable to any previous period. In this sense, my findings provide views à la Gordon (2015) and Hein (2016) with some support, but less to Summers (2014b) negative natural rate hypothesis, which suffers from theoretical weaknesses. Fourth, despite the several approaches often implemented, we trace out a complementary or even convergence in policy implications.

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Section: Introductionmentioning

confidence: 55%

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confidence: 99%

Does the Secular Stagnation hypothesis match the data? Evidence from the USA

Borsato¹

2023

Journal of Post Keynesian Economics

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“…In all affluent, early industrialised countries, growth rates are decreasing since decades, and secular stagnation (although disputed regarding causes and recipes, its existence seems to be beyond doubt) has been looming for a while, with the expected medium term growth at about 1% p.a. (Di Bucchianico, 2020; Eggertsson et al, 2019; Favero & Galasso, 2015). After the double hit of Covid and war it will be most probably lower although it may be arteficially increased for some time by the current 'war‐Keynesianism'.…”

Section: Where We Go—epochal Turnsmentioning

confidence: 99%

Epochal turns: Uncomfortable insights, uncertain outlooks

Spangenberg

Kurz

2023

Sustainable Development

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The perfect storm of converging political, security, environmental and social crises enforces an epochal turn. Necessarily increasing defensive expenditures for health and climate damage compensation combine with climate adaptation and increased security spending to drive already sluggish economic growth rates into negative territory. The result will by accelerating degrowth, an end to just-in-time production concepts, higher resource cost, new dependencies on metal exporters (some of them as nasty as Putin's Russia), and decreasing median incomes. Without significant U-turns on tax and distribution policies, funds will be lacking to address the challenges.Rather than promising easy ways out of the crises, stopping the drivers, focussing on well-being instead of growth, and exploring ways to a dignified life within the crises need to be political priorities.

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“…The place of ageing in the new "secular stagnation" hypothesis Framing the slowing of growth across advanced economies as "secular stagnation" has led to a number of hypotheses to account for the phenomenon. Each in turn highlights a different set of potential determinants, from those embedded within endogenous macroeconomic systems involving rates of savings, investment, interest and TFP to those that seek an explanation couched in terms of "external" structural factors, such as the effects of growing wealth and income inequalities, the dominance of capital versus labour in creating surplus, as well as demographic changes altering the ratio of production and consumption, savings and investment and labour productivity (Arsov and Ravimohan, 2016;Di Bucchianico, 2020;Eggertsson et al, 2019b;Gordon, 2012Gordon, , 2015Petach and Tavani, 2020;Storm, 2017).…”

Section: Secular Stagnation and Societal Ageingmentioning

confidence: 99%

More age, less growth? Secular stagnation and societal ageing

Gilleard¹

2022

IJSSP

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PurposeThe aim of the study is to demonstrate evidence that societal ageing and poor economic growth are linked in the advanced economies. It challenges the claim however that secular stagnation represents a serious problem for future prosperity.Design/methodology/approachThis paper critically reviews recent formulations of the secular stagnation hypothesis concerning stalled economic growth in the advanced economies and the links between demographic ageing and economic slowdown. It outlines both trends (of ageing and stalled growth) and reviews some of the key empirical studies that have sought to determine the role played by demographic change in accounting for the relative lack of growth in the advanced economies.FindingsThe advanced economies are ageing and their economic growth is slowing, although a causal link between these two phenomena remains unproven. However, even if no direct causal link can be drawn between these two processes the focus upon the impact of societal ageing serves as a stimulus to re-think the nature of future growth in our increasingly ageing and unequal societies.Research limitations/implicationsWhile the measurement of demographic trends is relatively straightforward, there are more problems in specifying the exact parameters of macroeconomic growth. This makes empirical studies in the area difficult to interpret. However studies in this area have value in widening thinking about the role of ageing and the nature of growth in the future.Practical implicationsRather than fearing the prospect of an age related slowdown in the rate of growth in the advanced economies, these developments offer opportunities to focus upon redistribution more than growth, while supporting a programme of growth with equity in the world's developing economies.Social implicationsWhile a demographically over-determined model of the secular stagnation hypothesis is dubious, the future ageing of the advanced economies is certainly a challenge. It is also an opportunity for rethinking ideas about ageing, growth and development. Adopting such a more nuanced perspective offers a counter-narrative to the demographic catastrophising that is often evident when discussing 'societal ageing'. It also suggests the value of shifting the perspective of seeking ever increasing growth toward a greater focus upon redistribution, between and within the generations.Originality/valueThere has been very little engagement with the secular stagnation hypothesis outside economics. Behind its macroeconomic formulation, however, lie assumptions about the ageing of society that can easily become examples of unwarranted demographic catastrophising. By bringing this topic to the attention of the social sciences, the paper can serve as a stimulus for rethinking both ageing and growth.

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Discussing Secular Stagnation: A case for freeing good ideas from theoretical constraints?

Cited by 16 publications

References 46 publications

Does the Secular Stagnation hypothesis match the data? Evidence from the USA

Does the Secular Stagnation hypothesis match the data? Evidence from the USA

Epochal turns: Uncomfortable insights, uncertain outlooks

More age, less growth? Secular stagnation and societal ageing

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