Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234134 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 160/2021
Publisher: 
Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE), Berlin
Abstract: 
The mainstream concept of Secular Stagnation provides a comprehensive theoretical picture to explain sluggish economic growth and engenders a renewed role for fiscal policy. For these reasons, it should be praised. Given the difficulties entailed by the theoretical framework in which the theory is located, this paper offers a perspective on US stagnation that is grounded in some of the same foundational elements of the mainstream attempt (inequality, sluggish population growth and ageing, household debt, housing bubble) but relies on a model in which growth is driven by the autonomous components of aggregate demand. Stagnation is the result of the failure to move from a household debt-plus-bubble-led model to a model led by public expenditure. In the course of the analysis, a new treatment of ageing is offered.
Subjects: 
Secular Stagnation
natural rate of interest
fiscal policy
aggregate demand
supermultiplier
JEL: 
E31
E40
E52
E58
Document Type: 
Working Paper

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