Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Secular stagnation’

Whither Central Banking?

Posted by hkarner - 26. August 2019

Anna Stansbury

Anna Stansbury is a PhD candidate in Economics at Harvard University.

Lawrence H. Summers, US Secretary of the Treasury (1999-2001) and Director of the US National Economic Council (2009-2010), is a former president of Harvard University, where he is currently University Professor.

In an environment of secular stagnation in the developed economies, central bankers’ ingenuity in loosening monetary policy is exactly what is not needed. What is needed are admissions of impotence, in order to spur efforts by governments to promote demand through fiscal policies and other means.

CAMBRIDGE – The world’s central bankers and the scholars who follow them are having their annual moment of reflection in Jackson Hole, Wyoming. But the theme of this year’s meeting, “Challenges for Monetary Policy,” may encourage an insular – and dangerous – complacency.

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Beyond Secular Stagnation

Posted by hkarner - 7. September 2018

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump.

There is no reason economists should agree about what is politically possible. What they can and should agree about is what would have happened if their preferred policies had been implemented – and keep those lessons in mind as the next downturn approaches.

NEW YORK – As Larry Summers rightly points out, the term “secular stagnation” became popular as World War II was drawing to a close. Alvin Hansen (and many others) worried that, without the stimulation provided by the war, the economy would return to recession or depression. There was, it seemed, a fundamental malady.

But it didn’t happen. How did Hansen and others get it so wrong? Like some modern-day secular stagnation advocates, there were deep flaws in the underlying micro- and macroeconomic analysis – most importantly, in the analysis of the causes of the Great Depression itself.

As Bruce Greenwald and I (with our co-authors) have argued, high growth in agricultural productivity (combined with high global production) drove down crop prices – in some cases by 75% – in the first three years of the Depression alone. Incomes in the country’s major economic sector plummeted by around half. The crisis in agriculture led to a decrease in demand for urban goods and thus to an economy-wide downturn. Den Rest des Beitrags lesen »

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Klarstellung zur säkularen Stagnation

Posted by hkarner - 5. September 2018

Lawrence H. Summers, US Secretary of the Treasury (1999-2001) and Director of the US National Economic Council (2009-2010), is a former president of Harvard University, where he is currently University Professor.

CAMBRIDGE – Joseph Stiglitz hat kürzlich die Relevanz einer säkularen Stagnation für die amerikanische Wirtschaft in Abrede gestellt und dabei meine Arbeit für die Regierungen der Präsidenten Bill Clinton und Barack Obama angegriffen (ohne meinen Namen zu erwähnen). Ich bin kein neutraler Beobachter, aber nicht zum ersten Mal finde ich, dass Stiglitz‘ wissenschaftlich theoretische Arbeit zwar überaus stark, aber seine politischen Kommentare ebenso schwach sind. 

Stiglitz ruft Konservative wie John Taylor in Erinnerung, wenn er darauf verweist, dass es sich bei der Idee der säkularen Stagnation um eine fatalistische Doktrin handelt, die als Ausrede für eine schlechte Wirtschaftsleistung in den Jahren der Präsidentschaft Obamas herhalten muss. Das ist einfach nicht richtig. Die Theorie der säkularen Stagnation – wie von Alvin Hansen konzipiert und von mir vorgebracht – besagt, dass die Privatwirtschaft im Anschluss an eine starke Kontraktion auf sich allein gestellt womöglich den Weg in Richtung Vollbeschäftigung nicht mehr findet, weswegen politischen Maßnahmen entscheidende Bedeutung zukommt. Ich glaube, das ist auch Stiglitz’ Meinung, weswegen ich seine Angriffe nicht verstehe.  Den Rest des Beitrags lesen »

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The Myth of Secular Stagnation

Posted by hkarner - 29. August 2018

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump.

Those responsible for managing the 2008 recovery found the idea of secular stagnation attractive, because it explained their failures to achieve a quick, robust recovery. So, as the economy languished, a concept born during the Great Depression of the 1930s was revived.

NEW YORK – In the aftermath of the 2008 financial crisis, some economists argued that the United States, and perhaps the global economy, was suffering from “secular stagnation,” an idea first conceived in the aftermath of the Great Depression. Economies had always recovered from downturns. But the Great Depression had lasted an unprecedented length of time. Many believed that the economy recovered only because of government spending on World War II, and many feared that with the end of the war, the economy would return to its doldrums.

Something, it was believed, had happened, such that even with low or zero interest rates, the economy would languish. For reasons now well understood, these dire predictions fortunately turned out to be wrong.

Those responsible for managing the 2008 recovery (the same individuals bearing culpability for the under-regulation of the economy in its pre-crisis days, to whom President Barack Obama inexplicably turned to fix what they had helped break) found the idea of secular stagnation attractive, because it explained their failures to achieve a quick, robust recovery. So, as the economy languished, the idea was revived: Don’t blame us, its promoters implied, we’re doing what we can. Den Rest des Beitrags lesen »

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Secular Stagnation?

Posted by hkarner - 23. Juni 2017

June 21, 2017

The effects on growth were predictable, says Charles, having been explained by Joseph Schumpeter in his 1942 book Capitalism, Socialism and Democracy.

More recently, in the US, when government spending as a percentage of GDP shot up from 33% to 39% during the Great Recession, our growth rate fell from 2.5% to less than one percent. And that, says Charles, is the story on US stagnation – not the more fashionable narrative of “secular stagnation.” Den Rest des Beitrags lesen »

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Understanding Today’s Stagnation

Posted by hkarner - 24. Mai 2017

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The Risks to America’s Booming Economy

Posted by hkarner - 30. März 2017

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The end of “secular stagnation”?

Posted by hkarner - 11. März 2017

Date: 09-03-2017
Source: The Economist

Improving economic data do not necessarily indicate underlying health

IN PERIODS of economic stress all sorts of theories are entertained about the nature of the problem. When better times return, some theories fade from memory. Others linger, however. During the economic mess of the past decade, economists frightened themselves with tales of “secular stagnation”: a nasty condition that dooms its victims to chronically weak growth. Now that the economic outlook is brightening a bit—deflation has been dispatched, and for most advanced economies 2017 is forecast to bring a third consecutive year of economic growth—it is tempting to laugh off the idea of secular stagnation as a bit of crisis-induced hysteria. Tempting, but also premature. Den Rest des Beitrags lesen »

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Secular Stagnation or Self-Inflicted Malaise?

Posted by hkarner - 28. September 2016

Photo of Hans-Werner Sinn

Hans-Werner Sinn

Hans-Werner Sinn, Professor of Economics and Public Finance at the University of Munich, was President of the Ifo Institute for Economic Research and serves on the German economy ministry’s Advisory Council. He is the author, most recently, of The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs.

SEP 27, 2016, Project Syndicate

MUNICH – Almost exactly eight years ago, the Lehman Brothers collapse plunged the global economy into recession. The interbank market collapsed, and the entire industrialized world was thrown into the worst crisis since the end of World War II. Though central banks have maintained ultra-low interest rates, the crisis hasn’t yet been fully overcome. On the contrary, numerous economies, such as the southern European countries and France, simply aren’t making any headway. And Japan has been on the ropes for a quarter-century.

Some economists believe that this is evidence of “secular stagnation,” a phenomenon described in 1938 by the American economist Alvin Hansen, who drew on Karl Marx’s Law of the Tendency of the Rate of Profit to Fall. Owing to the gradual exhaustion of profitable investment projects, according to this view, the natural real interest rate has continued to fall. Stabilizing the economy thus is possible only by an equivalent decline in policy interest rates. Den Rest des Beitrags lesen »

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The tail that wags the economy: The origin of secular stagnation

Posted by hkarner - 13. September 2016

Julian Kozlowski, Laura Veldkamp, Venky Venkateswaran, 

PhD Candidate in Economics, New York University

Professor of Economics at the Stern School of Business, New York University

Assistant Professor of Economics, New York University’s Stern School of Business

 

11 September 2016, voxeu

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