Jamie S
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Report Thread starter 6 years ago

I was just wondering if there is a significant difference (and what the difference is) between Secular stagnation and Economic stagnation?

Many thanks,

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Report 5 years ago
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Badges: 14
Report 5 years ago
secular stagnation= lower rates of productivity growth/ or economic growth structurally

"a chronic structural mismatch between the proclivity to save and the desire for those savings to transform into investments, or the response of savings to interest rate changes as such that equilibrium is not made possible"

ie. things don't work as people want it to

causes can include a long lasting effect of a recession on businesses and consumers to invest/comsume

largely quite similar, although secular stagnation explained by krugman: "we will often find ourselves facing persistent shortfalls of demand, which can’t be overcome even with near-zero interest rates (during/with secular stagnation)"

quite hard to get your head round it all id say, but id say secular stagnation is more to do with historical averages whereas economic stagnation may be considered on a more short term basis- i.e. last 2 years

people have said (such as larry summers) that the last decade or so (pre 2008 and post) have experienced secular stagnation as growth rates seem to be much lower than expected after a recession like this, and a boom in capital which was experienced worldwide afterwards. (the economist isn't so confident on the theory though)


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