Speakers
Description
Economic stagnation represents a complex and evolving macroeconomic phenomenon that continues to challenge economists, policymakers, and institutions worldwide. Although it lacks a universally accepted definition, economic stagnation broadly refers to a prolonged period of subdued or near-zero growth in Real Gross Domestic Product (RGDP), distinct from recessions, which are marked by two consecutive quarters of negative growth. This conceptual ambiguity complicates efforts to identify and address stagnation, particularly when growth remains persistently below potential and historical norms without exhibiting the sharp contractions typical of a recession.
This paper aims to explore and refine the concept of secular stagnation—a long-term, structural form of economic stagnation that differs in both causes and consequences from cyclical slowdowns. Unlike short-term downturns, secular stagnation implies a chronic condition of economic underperformance, commonly characterized by diminished productivity growth, weak aggregate demand, innovation deficits, and a declining responsiveness to traditional monetary and fiscal tools. Suboptimal growth, combined with persistent inflationary pressures and an unsustainable level of indebtedness, has significantly constrained the effectiveness of policy interventions, further undermining recovery efforts and challenging the traditional macroeconomic policy framework.
Accordingly, the study differentiates between short-run stagnation (transient and policy-sensitive) and long-run stagnation (structural and persistent), asserting that the latter better reflects the prevailing conditions in many advanced economies, particularly the United States. Our central hypothesis posits that the U.S. economy has shown clear signs of secular stagnation in the post-Great Recession period (2008–2024), characterized by lackluster economic performance despite substantial and sustained policy intervention. We argue that this stagnation is not a temporary deviation but a symptom of deeper, structural economic weaknesses.
To support this claim, we conduct a longitudinal, data-driven analysis of U.S. growth rates from the 1930s to the present. This empirical approach minimizes subjective interpretation and highlights significant deviations from historical patterns, suggesting a structural break in the post-2008 era. The study also critically engages with key theoretical frameworks and historical interpretations of stagnation, demonstrating how earlier views often treated stagnation as a cyclical or policy-fixable issue. In contrast, our findings underscore the importance of addressing long-run structural deficiencies through targeted reforms—particularly in productivity, education, infrastructure, innovation, and labor market dynamics—as essential to mitigating secular stagnation and fostering sustainable economic growth.
