Secular stagnation

According to The Economist, it was used to "describe what he feared was the fate of the American economy following the Great Depression of the early 1930s: a check to economic progress as investment opportunities were stunted by the closing of the frontier and the collapse of immigration".

[8] The idea of secular stagnation dates back to the Great Depression, when some economists feared that the United States had permanently entered a period of low growth.

[8] An analysis of stagnation and what is now called financialization was provided in the 1980s by Harry Magdoff and Paul Sweezy, coeditors of the independent socialist journal Monthly Review.

In their 1987 book, Stagnation and the Financial Explosion, they argued, based on Keynes, Hansen, Michał Kalecki, and Marx, and marshaling extensive empirical data,[citation needed] that, contrary to the usual way of thinking, stagnation or slow growth was the norm for mature, monopolistic (or oligopolistic) economies, while rapid growth was the exception.

Economists have asked whether the low economic growth rate in the developed world leading up to and following the subprime mortgage crisis of 2007-2008 was due to secular stagnation.

Paul Krugman wrote in September 2013: "[T]here is a case for believing that the problem of maintaining adequate aggregate demand is going to be very persistent – that we may face something like the 'secular stagnation' many economists feared after World War II."

[15] Secular stagnation was dusted off by Hans-Werner Sinn in a 2009 article [17] dismissing the threat of inflation, and became popular again when Larry Summers invoked the term and concept during a 2013 speech at the IMF.

[3] Warnings of impending secular stagnation have been issued after all deep recessions, but turned out to be wrong because they underestimated the potential of existing technologies.

[20] A fourth is that advanced economies are just simply paying the price for years of inadequate investment in infrastructure and education, the basic ingredients of growth.

While 'limits to growth' thinking went out of fashion in the decades following the initial publication in 1972, a recent study[26] shows human development continues to align well with the 'overshoot and collapse' projection outlined in the standard run of the original analysis, and this is before factoring in the potential effects of climate change.

A 2018 CUSP working paper by Tim Jackson, The Post-Growth Challenge,[27] argues that low growth rates might in fact be ‘the new normal’.