Blog Post
Larry Summers’ and Łukasz Rachel’s most recent study documents a secular fall in neutral real rates in advanced economies. According to the authors, this fall would be even more marked in the absence of offsetting fiscal policies. Policymaking in a world of permanently low interest rates may be hard to navigate, especially in troubled waters. We review economists’ views on the matter
Blog Post
Economists have been discussing the implications of the rise of the intangible economy in relation to the secular stagnation hypothesis, and looking more generally into the policy implications it has for taxation. We review some recent contributions.
Opinion
The factors that dragged down the global economy in 2015 will persist – and in some cases even intensify – in the new year.
Past Event
This is the 3rd conference in a series of events jointly organised by Graduate School of Economics, Kobe University and Bruegel
Blog Post
What’s at stake: The question of whether capitalist economies are self-correcting and will eventually revert to mean growth has received renewed interest given the underperformance of most economies six years after the onset of the Great Recessions. While the idea of persistent high unemployment was central to Keynes’ General Theory, it was quickly abandoned by the neoclassical synthesis.
Opinion
The ECB has lowered its official interest rate several times in the last years and the rate is now at zero. In March of this year, it has in addition started a large sovereign bond purchase programme. Contrary to popular belief, however, the ECB is not the main driver of the decline in interest rates.
Blog Post
What’s at stake: Former Chairman of the Federal Reserve and new blogger Ben Bernanke has generated many discussions this week by challenging the secular stagnation idea. Bernanke argues, in particular, that the stagnationists have failed to properly take into account how capital flows can mitigate or even eliminate the problems generated by secular stagnation at home.
Blog Post
Spain and the United Kingdom are going through a deleveraging process, with their private debt-to-GDP ratios dropping by around 18% in the United Kingdom and 15.5% in Spain from their respective peaks some years ago. However, the mechanics behind the deleveraging process show substantial differences between the two countries.
Blog Post
In his press conference on November 6th, ECB President Mario Draghi pledged monetary stimulus, although only “if needed.” These words have won Mr. Draghi many admirers for his determination to move decisively forward. But the actions tell a different story. The “if needed” mantra is only the most recent example of the ECB’s congenital conservatism in dealing with the ever-unfolding crisis. Once again, the ECB is behind the curve even as a debt-deflation cycle is ongoing in the so-called “periphery.” Rather than a central bank that helps revive growth and inflation, the ECB has become a safety net for dealing with near-insolvency conditions.
Blog Post
Larry Summers crystallized an important question in a recent speech: Has the world economy entered a period of “secular stagnation”? The slow recovery in the United States since the financial crisis is his starting point and he argues that secular stagnation could also retrospectively explain features of previous decades, such as low inflation.
Blog Post
Larry Summers crystallized an important development and question in a recent speech given at the IMF research conference: has the world economy entered a period of “secular stagnation”? The slow recovery in the US since the financial crisis is his starting point and he argues that secular stagnation could retrospectively also explain features of previous decades such as low inflation.
Blog Post
What’s at stake: On November 16, the Harvard economist and former Treasury Secretary Lawrence Summers gave a provocative talk at an International Monetary Fund conference, where he argued that an age of secular stagnation, in which the equilibrium interest rate is negative, might explain the lack of inflationary pressure we experienced in the boom years of the previous decades and the slow recovery following the 2007 crisis.
