Are we facing a new normal of slow growth and low interest rates into the indefinite future? Larry Summers raised the question of secular stagnation—a long-term trend of negligible or no economic growth and historically low interest rates—several years ago based on the nation’s anemic economic performance since the beginning of the recovery from the 2008 financial crisis.
Following a decade of slow or sometimes negative growth after the Great Recession—in which annual growth per capita has been less than half the annual average since the 1970s—The Institute for New Economic Thinking (INET) commissioned papers to explore the question of secular stagnation and offer solutions. Scholars presented and discussed their work at this day-long conference.
New papers presented at the event:
- Analyze the secular stagnation proposition, including the notion that the current lengthy period of slow growth and very low interest rates is the “new normal.”
- Identify and debate causes of weak economic performance in developed countries including declining productivity growth, inadequate aggregate demand and output gaps, excess capacity, and underused capital and human assets.
- Explore policy solutions aimed at reinvigorating growth, such as so-called “helicopter money” and the judicious use of monetary finance.