The global economy appears to be stuck in a pattern of low growth, low inflation and unresolved debt burdens. Is this a result of policy mistakes, or have the fundamental dynamics of the economy shifted into an era of little or no growth known as secular stagnation?
The U.S. economy is widely diagnosed with two ‘diseases’: a secular stagnation of potential U.S. growth, and rising income and job polarization. The two diseases have a common root inthe demand shortfall, originating from the ‘unbalanced’ growth between technologically ‘dynamic’ and ‘stagnant’ sectors. Read more
The main point of this paper is that loanable funds macroeconomic models with their “natural” interest rate don’t fit with modern institutions and data. Before getting into the numbers, it makes sense to describe the models and how to think about macroeconomics in the first place. Read more