Economics at your fingertips  

Secular Stagnation: What the Debate is about?

Gergely Hudecz ()
Additional contact information
Gergely Hudecz: Pharo Management, London

Society and Economy, 2017, vol. 39, issue 1, 125-140

Abstract: In the aftermath of the 2008 financial crisis, the recovery in economic activity has been weak and much of the academic and policy discussions seek to explain this sluggish growth. This literature review presents how the secular stagnation hypothesis re-emerged in 2013 and evolved over time. It identifies its key tenets, its most contentious points and its most important critiques. Secular stagnation has different interpretations, which complicates the debate, and the objective of this paper is to clarify the demarcation lines between various theories and to show how some of them amalgamated over time. The secular stagnation hypothesis links weak growth to a decline in natural interest rates. Most observers agree that natural interest rates have indeed declined over the past decade and may be in negative territory. However, there are diverging views about the factors which led to negative interest rates and how lasting their impact is likely to be. The secular stagnation hypothesis points to various fundamental factors and suggests a long-term effect, while the global savings glut and debt super-cycle concepts assume only a temporary impact and anticipate that global economic growth and real interest rates will eventually rebound.

Keywords: growth; hysteresis; interest rate; saving; investment; stagnation (search for similar items in EconPapers)
JEL-codes: E00 F00 O40 (search for similar items in EconPapers)
Date: 2017
Note: The author would like to thank Laszlo Andor, Marcelo Castro, Reinout De Bock, Charles Hallion and Andras Hudecz for helpful comments on previous drafts of this paper.
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
Akadémiai Kiadó Zrt., Prielle K. u. 21-35. Budapest, 1117, Hungary

Access Statistics for this article

Society and Economy is currently edited by Trautmann, László

More articles in Society and Economy from Akadémiai Kiadó, Hungary
Bibliographic data for series maintained by Vajda, Lőrinc ().

Page updated 2018-12-29
Handle: RePEc:aka:soceco:v:39:y:2017:i:1:p:125-140