Euro area economic growth between 2010 and 2019 in the light of secular stagnation theory
Tibor Tatay and
Eszter Kazinczy
Public Finance Quarterly, 2023, vol. 69, issue 3, 72-88
Abstract:
Achieving economic growth remains an important issue for economic policy today. Growth in developed economies has slowed considerably in recent decades. In our study, we examine economic growth in the euro area between 2010 and 2019 in the light of secular stagnation theory. The concept of secular stagnation was developed by Hansen after the Great Depression of 1929-33. According to this theory, the cauSes of secular stagnation are low population growth and weak technological development. The concept was brought back into the economic discourse after 2010 by Summers. Following the 2008 crisis, euro area economies should have adjusted to a higher growth rate. Instead, growth remained below 2% for all but one year, below potential output for most of the decade. Investment rates have barely risen despite euro interest rates falling to near zero. The euro areas population barely grew despite a net migration surplus, putting a brake on employment growth. The available data suggest that neither employment growth nor productivity growth have boosted economic growth. The low level of economic growth and the evolution of the underlying factors are consistent with the theoretical assumptions described by Hansen and his followers.
Keywords: secular stagnation; economic growth; euro area (search for similar items in EconPapers)
JEL-codes: J11 J13 O40 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
https://unipub.lib.uni-corvinus.hu/9306/ (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: https://EconPapers.repec.org/RePEc:pfq:journl:v:69:y:2023:i:3:p:72-88
DOI: 10.35551/PFQ_2023_3_4
Access Statistics for this article
More articles in Public Finance Quarterly from Corvinus University of Budapest Contact information at EDIRC.
Bibliographic data for series maintained by Adam Hoffmann ().