Working Paper n°2016-09
How secular is the current economic stagnation?
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La stagnation actuelle est-elle vraiment séculaire ?
Maria Roubtsova
Membre du CEPN – Université Paris 13
maria.roubtsova [at] univ-paris13.fr
Septembre 2016
Abstract
From the burst of the dotcom bubble in 2000, until the global financial crisis that started in August 2007, the global economy was growing. During that phase, macroeconomics went through an era of general optimism around the idea of having reached a great moderation, with high steady growth and low stable inflation. Central bankers thought they managed to dampen the economic cycles. This era came to an end following the meltdown which started with the global financial crisis of 2007. And as among economic agents, macroeconomists’ general state of mind went from optimism to pessimism. Almost ten years since the beginning of the crisis, growth is not back to its pre-crisis trends. Therefore, macroeconomists are debating the notion of a secular stagnation. Is the economy on a long-term stagnation trend, if so, for what reasons, and how to address this situation?
This paper offers a critical review of the debates among macroeconomists around this notion of secular stagnation, a concept which was invented by Alvin Hansen following the global economic crisis of the 1930s, and was brought back into the public debate largely by Lawrence Summers since the end of 2013. This literature review starts with a brief synthesis of the original debate about secular stagnation, launched by Hansen in 1938, and ended in the mid-1950s, since these debates inspired contemporary theorists. The second part highlights the main elements of neoclassical explanations for secular stagnation. The third part focuses on the Minskian idea of the end of a debt super-cycle. The last part offers a contemporary reading of the unleashing of the contradictions of capitalism, and the tendency of mature capitalism to generate oligopolies, as a cause for long stagnation.
Résumé
En 2016, alors que la durée de la crise s’approche de la décennie, les macroéconomistes débattent pour savoir si l’économie des pays développés est sur une tendance de long terme à la stagnation, et si oui pourquoi, et comment y remédier. Cet article fait une revue critique des débats autour de cette question. Elle remonte aux années 30-50 (invention du terme de « stagnation séculaire » par Hansen), résume les principales positions des économistes néoclassiques contemporains, avant de se tourner vers une explication post-Keynésienne: nous avons atteint la fin d’un super-cycle de la dette privée (à la Minsky), et une phase du capitalisme très marquée par l’oligopole (à la Steindl). Ainsi, la stagnation actuelle n’est pas une singularité historique due au secteur privé, mais la conjonction de plusieurs tendances systémiques libérées par des « politiques de la stagnation » (Steindl).
Keywords
macroeconomics, secular stagnation, balance sheet recession, financialization, private debt, growth and distribution
JEL codes
E39, E44, E66, G01
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