Does the Secular Stagnation hypothesis match the data? Evidence from the USA

Andrea Borsato ()
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Andrea Borsato: Univ Newcastle, Sch Environm & Life Sci, Callaghan, NSW 2308, Australia, BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: This paper focusses on Secular Stagnation in the United States. It answers to two research questions. First: is Secular Stagnation a fact? Second: conditional to the previous reply, how does the literature meet the qualitative and quantitative evidence? I focus on historical annual data related to the USA from 1870 onwards. The contribution to the debate is manifold. Firstly, I provide a careful systematization of the concept and explain why this definition is crucial for the topic analysis. Secondly, I talk about Secular Stagnation in terms of labor and multifactor productivity growth: their decline since the 1970s is not comparable to any previous shortfall. Thirdly, the definition allows to evaluate whether present-day debates on the phenomenon are supported by data, but it also lets to disentangle the most relevant channels through which Secular Stagnation emerges. Therefore, I carry out a comparative validation exercise on the different lines of thought. Finally, as long as Secular Stagnation is confirmed as empirical evidence, also policy implications can be drawn from the different theoretical frameworks. Despite the several contrasting approaches and viewpoints, I trace out a complementary in policy implications.

Keywords: Secular Stagnation; Negative interest rates; GDP and productivity slowdown in growth; Stagnation policy (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

Published in Journal of Post Keynesian Economics, 2023, pp.1-29. ⟨10.1080/01603477.2023.2242346⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04272117

DOI: 10.1080/01603477.2023.2242346

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