secular stagnation

secular stagnation

a situation in which the economy remains trapped in the DEPRESSION phase of the BUSINESS CYCLE for long periods of time with low levels of AGGREGATE DEMAND in relation to productive capacity. This could result from a combination of factors, such as low levels of consumer spending (high savings), a high fixed-exchange rate that limits exports and leads to increased IMPORT PENETRATION, reduced investment in the economy reflecting business pessimism.

Typically, governments will seek to counteract a tendency towards secular stagnation by expansionary DEMAND-MANAGEMENT policies involving, for example, tax cuts, increased government spending and reduced interest rates to stimulate consumption and investment and, perhaps, a DEVALUATION of the exchange rate to increase demand for exports and to check imports. See EQUILIBRIUM LEVEL OF NATIONAL INCOME.

References in periodicals archive ?
These developments seem to lend further support to the concept of secular stagnation; indeed, the issue is much more profound than is generally appreciated.
Recall how liberals blamed secular stagnation as the reason worker incomes werent growing faster during the latter years of Barack Obamas Presidency.
Because annual growth over the past decade has often been tepid and insufficiently inclusive - what has become known as the "new normal," or secular stagnation - the U.S.
Two-thirds of FMS investors are bearish on both the growth and inflation outlook for the global economy over the next 12 months, the highest level expecting secular stagnation since October 2016.
Yet these reforms are very important for the expansion of employment oppor- tunities, especially within the Eurozone, where the lingering effects of a fiscal and sovereign debt crisis have sustained high unemployment rates, resulting in income and secular stagnation that are perhaps fuelling the resentment against immigrants.
Yet these reforms are very important for the expansion of employment opportunities, especially within the Eurozone, where the lingering effects of a fiscal and sovereign debt crisis have sustained high unemployment rates, resulting in income and secular stagnation that are perhaps fuelling the resentment against immigrants.
But as she noted, for a decade now the concern has been about persistent weakness - that the economy was stuck in a state of what prominent economists deemed "secular stagnation."
(2) Second, intangible capital is fundamentally different from tangible capital in ways that help to explain recent economic developments-such as secular stagnation and rising inequality.
While there is no general agreement about the causes of this slowdown, there is concern among a number of prominent economists that it may presage the beginning of an extended period of secular stagnation. (2) Many contend, moreover, that technological change, which, for the last 150 or so years, through good times and bad, had been a main source of productivity advances and output growth is no longer up to the task.
Summary: The final word on secular stagnation has clearly not been said
I continue to have disagreements with Stiglitz on the record of policy advice, and with both Stiglitz and Farmer on some points of theory regarding secular stagnation. Starting with the policy record, Stiglitz is right to assert that economists should not be expected to agree on issues of political feasibility.
Moreover, the debate on secular stagnation was raging.