Why this evidence is so significant becomes clear when we recognize that the main risks to the global economy are now completely different from the "New Normal" of secular stagnation
, "low-flation," recession, and European instability that markets have spent the past decade worrying about.
That is why I sought to resurrect the secular stagnation
theory - the idea that the economy, except at moments of financial excess, was likely to suffer from an excess of saving over investment and be prone to sluggishness and insufficient inflation.
Instead of falling back into recession or secular stagnation
, the US economy continued growing and creating jobs as the stimulus was reduced and then stopped.
Keywords: productivity slowdown, secular stagnation
, TFP growth
The problem of secular stagnation
, which has tried to specify the adhered low growth of the global economy, has often led to the destabilization of jobs in the course of the restructuring.
Benigno and Fornaro (2015) also show an equilibrium representing a secular stagnation
by combining a standard short-run Keynesian model with an endogenous growth model.
Although secular stagnation
became a meme five years after the 2008 financial crisis, the term itself is much older.
The core countries have not been immune from their own difficulties, and have begun to experience secular stagnation
as their economies have matured.
Given the political turmoil, the low probability of a fiscal package and other structural aspects (in relation with secular stagnation
, savings glut), we believe that Treasury yields are capped and may even decline further.
Acknowledgement We thank John Fernald, seminar participants at the Boston Federal Reserve Bank, and participants at the Banque de France's 2017 conference on Secular Stagnation
and Growth Measurement for helpful comments on earlier versions of the paper.
Economists and historians from the US and Europe outline the international monetary system and challenges that shaped it; historical antecedents of today's challenges in terms of secular stagnation
and the asymmetric burden of adjustment; how the modern international monetary system has been shaped through international financial diplomacy; present-day currency wars and secular stagnation
; and international policy coordination.
Post Crisis: Third-Generation Models of Secular Stagnation