scholarly journals The Secular Stagnation Hypothes is and the Future of Europe’s Advanced Economies

Politeja ◽  
2020 ◽  
Vol 17 (3(66)) ◽  
pp. 53-66
Author(s):  
Artur F. Tomeczek
Keyword(s):  
World War Ii ◽  
Western Europe ◽  
Short Review ◽  
Economic Research ◽  
Natural Rate ◽  
Secular Stagnation ◽  
The Great Depression ◽  
Advanced Economies ◽  
The Future ◽  
Natural Rate Of Interest

The secular stagnation hypothesis originated in the late 1930s when Alvin Hansen proposed that the American economy will experience a prolonged depression because of the slowdown in demographics. Widely discussed in the aftermath of the Great Depression, interest in this hypothesis has waned as the world entered a period of rapid economic growth after World War II. In the years following the Great Recession, the secular stagnation hypothesis has once again come to the forefront of economic research when Lawrence Summers introduced the so‑called “new secular stagnation hypothesis.” This article aims to establish whether the secular stagnation hypothesis is relevant to the future of Europe’s advanced economies. Two main symptoms of secular stagnation (demographic slowdown and decline in the natural rate of interest) are especially noticeable in Western Europe. The article has three parts. Part one contains a theoretical overview of the secular stagnation hypothesis. Part two comprises the empirical analysis of the macroeconomic situation in selected advanced economies in Europe and a short review of findings in the literature on the natural rate of interest. Part three identifies possible future problems and provides brief policy recommendations. I conclude that Italy, and to a lesser degree, Spain and Germany, are the countries most vulnerable to secular stagnation.

scholarly journals A Model of Secular Stagnation: Theory and Quantitative Evaluation

2019 ◽  
Vol 11 (1) ◽  
pp. 1-48 ◽  
Author(s):  
Gauti B. Eggertsson ◽  
Neil R. Mehrotra ◽  
Jacob A. Robbins
Keyword(s):  
Interest Rates ◽  
Elevated Risk ◽  
New Keynesian ◽  
Foreseeable Future ◽  
Cycle Model ◽  
Natural Rate ◽  
Secular Stagnation ◽  
Technological Factors ◽  
Natural Rate Of Interest ◽  
Standard Calibration

This paper formalizes and quantifies the secular stagnation hypothesis, defined as a persistently low or negative natural rate of interest leading to a chronically binding zero lower bound (ZLB). Output-inflation dynamics and policy prescriptions are fundamentally different from those in the standard New Keynesian framework. Using a 56-period quantitative life cycle model, a standard calibration to US data delivers a natural rate ranging from − 1.5 percent to − 2 percent, implying an elevated risk of ZLB episodes for the foreseeable future. We decompose the contribution of demographic and technological factors to the decline in interest rates since 1970 and quantify changes required to restore higher rates. (JEL E12, E23, E31, E32, E43, E52)

Planning in Africa

1965 ◽  
Vol 3 (4) ◽  
pp. 473-497 ◽  
Author(s):  
Abdelmalek Ben-Amor ◽  
Frederick Clairmonte
Keyword(s):  
World War Ii ◽  
State Intervention ◽  
Developed Countries ◽  
Economic Planning ◽  
Underdeveloped Countries ◽  
The Great Depression ◽  
The United Kingdom ◽  
Advanced Economies ◽  
Post War ◽  
The Developed Countries

Economic planning is now a commonly acclaimed ideal in the underdeveloped countries, particularly in Africa. Both the theory and the practice were transmitted by the developed countries. Certainly, the advanced economies have very different conceptions of planning, depending on whether they are centrally planned or market-oriented. The former embrace economic planning by ideological predilection; the latter are moving in the direction of ‘indicative’ planning, or at least state intervention on an extended scale. This course was induced by the goad of the crisis-ridden years of the great depression, the exigencies of World War II, the pressures of post-war reconstruction, and the stupendous technological and organisational revolution of our times. In the metropolitan countries—France, Belgium, and the United Kingdom—the idea and practice of economic planning was propagated to the colonies during and after the war.

Realignment

2018 ◽  
Author(s):  
Evan Osborne
Keyword(s):  
United States ◽  
World War Ii ◽  
Soviet Union ◽  
Western Europe ◽  
Self Regulation ◽  
The United States ◽  
The Self ◽  
World War ◽  
The West ◽  
The Great Depression

The later nineteenth and early twentieth centuries witnessed arguments from social reformers and artists and economists that the new, spontaneously evolving society was deficient. It worsened poverty, and it impoverished the soul. The tool of political regulation, exercised in the growing political power of the emerging organization known as the nation, was called in to polish the rough edges of the self-regulating society. As time went on, political regulation gradually came to be seen as the default, and self-regulation needed to be justified. The chapter particularly emphasizes the growth in such thinking among socialists and progressives in the United States and Western Europe. The catastrophe of the Great Depression, combined with admiration for a Soviet Union, Italy, and Germany, where political regulators said they were rationally designing a better society, meant that by the onset of World War II, this presumption was firmly in place throughout the West.

scholarly journals The Case against the New "Secular Stagnation Hypothesis"

2021 ◽  
Vol 24 (2) ◽  
pp. 219-253
Author(s):  
Mihai Macovei
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Explanatory Power ◽  
Bank Loan ◽  
Rate Theory ◽  
Natural Rate ◽  
Secular Stagnation ◽  
Natural Rate Of Interest ◽  
The Global Financial Crisis

The new “secular stagnation hypothesis” developed by Lawrence H. Summers attempts to justify why the demand stimulus applied in the aftermath of the global financial crisis failed to revive growth in a satisfactory manner. Building on previous ideas of Keynes, Hansen, and Bernanke, Summers claims that excess savings together with feeble investment drove the natural rate of interest down to zero and advanced economies into stagnation. As the US monetary policy rate is not allowed to fall below the zero bound, Summers calls for “quantitative easing” and more expansionary fiscal policy to spur investment demand. This paper refutes Summers’s hypothesis by revealing its internal inconsistencies and presenting both theoretical arguments and empirical evidence on the long-term evolution of savings, investment, productivity, and capital stock. It also estimates the natural rate of interest following the approach of Salerno (2020), which is further refined based on Rothbard’s “pure interest rate” theory. The calculation shows that the natural interest rate did not drop to zero after the global financial crisis, but has actually remained consistently and significantly above the federal funds rate and the bank loan prime rate. This not only invalidates Summers’s central claim, but confirms once more the explanatory power of the Austrian business cycle theory in relation to the main trigger of the global financial crisis and its subsequent unfinished recovery.

National Socialism and Consumption

2012 ◽  
Author(s):  
S. Jonathan Wiesen
Keyword(s):  
World War Ii ◽  
National Socialism ◽  
Western Europe ◽  
Third Reich ◽  
The United States ◽  
Consumer Society ◽  
National Socialist ◽  
Benito Mussolini ◽  
The Great Depression ◽  
The Third Reich

Many important works in the field of consumer studies focus on the United States and post-World War II Western Europe, with the former often cast as the paradigmatic example of consumer society. Notwithstanding the disruptions of the Great Depression and less-severe business cycles, these societies offer plentiful images of bustling stores, widening economic opportunities, and the emergence of politicized citizen-consumers. The unique violence of the movements – whether manifested in the militant machismo of Benito Mussolini or the genocidal thrust of National Socialism – sets fascism apart from other twentieth-century developments. This article addresses some of the questions that emerge from a consideration of fascism and consumption, focusing in particular on National Socialist Germany, where consumption served a uniquely harsh end. It explores how Nazism envisioned the function of buying, selling, and consuming; the extent to which consumption was shaped by the state's ideological priorities; Nazi visions of consumption; realities of consumption and marketing in the Third Reich; and the debate on consumption and consent.

The Future of Global Great Power Competition after the Coronavirus

2020 ◽  
pp. 79-92
Author(s):  
Burhanettin Duran
Keyword(s):  
World War Ii ◽  
International System ◽  
Radical Change ◽  
Economic Effects ◽  
World War ◽  
Health Security ◽  
Self Sufficiency ◽  
The Future ◽  
Policy Agendas ◽  
The U.S

Due to the COVID-19 pandemic, the domestic and foreign policy agendas of all countries have been turned upside down. The pandemic has brought new problems and competition areas to states and to the international system. While the pandemic politically calls to mind the post-World War II era, it can also be compared with the 2008 crisis due to its economic effects such as unemployment and the disruption of global supply chains. A debate immediately began for a new international system; however, it seems that the current international system will be affected, but will not experience a radical change. That is, a new international order is not expected, while disorder is most likely in the post-pandemic period. In an atmosphere of global instability where debates on the U.S.-led international system have been worn for a while, in the post-pandemic period states will invest in self-sufficiency and redefine their strategic areas, especially in health security. The decline of U.S. leadership, the challenging policies of China, the effects of Chinese policies on the U.S.-China relations and the EU’s deepening crisis are going to be the main discussion topics that will determine the future of the international system.

Labor’s Cold Warriors: The American Federation of Labor and “Free Trade Unionism” in Cold War Japan

2003 ◽  
Vol 12 (3-4) ◽  
pp. 207-224 ◽  
Author(s):  
Christopher Gerteis
Keyword(s):  
World War Ii ◽  
Cold War ◽  
Soviet Union ◽  
Western Europe ◽  
The United States ◽  
Central Intelligence Agency ◽  
United States Government ◽  
American Federation Of Labor ◽  
Intelligence Agency ◽  
American Federation

AbstractDuring the 1950s, the American Federation of Labor (AFL) led a global covert attempt to suppress left-led labor movements in Western Europe, the Mediterranean, West Africa, Central and South America, and East Asia. American union leaders argued that to survive the Cold War, they had to demonstrate to the United States government that organized labor was not part-and-parcel with Soviet communism. The AFL’s global mission was placed in care of Jay Lovestone, a founding member of the American Communist Party in 1921 and survivor of decades of splits and internecine battles over allegiance to one faction or another in Soviet politics before turning anti-Communist and developing a secret relation with the Central Intelligence Agency (CIA) after World War II. Lovestone’s idea was that the AFL could prove its loyalty by helping to root out Communists from what he perceived to be a global labor movement dominated by the Soviet Union. He was the CIA’s favorite Communist turned anti-Communist.

scholarly journals Was the Gibson Paradox for real? A Wicksellian study of the relationship between interest rates and prices

2014 ◽  
Vol 21 (2) ◽  
pp. 139-163 ◽  
Author(s):  
Jagjit S. Chadha ◽  
Morris Perlman
Keyword(s):  
Interest Rates ◽  
Positive Relationship ◽  
Formal Model ◽  
Natural Rate ◽  
Market Rate ◽  
Long Run ◽  
Advanced Economies ◽  
The Uk ◽  
Gibson Paradox ◽  
The Relationship

We examine the relationship between prices and interest rates for seven advanced economies in the period up to 1913, emphasising the UK. There is a significant long-run positive relationship between prices and interest rates for the core commodity standard countries. Keynes ([1930] 1971) labelled this positive relationship the ‘Gibson Paradox’. A number of theories have been put forward as possible explanations of the paradox but they do not fit the long-run pattern of the relationship. We find that a formal model in the spirit of Wicksell (1907) and Keynes ([1930] 1971) offers an explanation for the paradox: where the need to stabilise the banking sector's reserve ratio, in the presence of an uncertain ‘natural’ rate, can lead to persistent deviations of the market rate of interest from its ‘natural’ level and consequently long-run swings in the price level.

The German Problem: 1945–1950

1968 ◽  
Vol 20 (2) ◽  
pp. 279-300 ◽  
Author(s):  
Klaus Epstein
Keyword(s):  
United States ◽  
World War Ii ◽  
Prior Knowledge ◽  
Good Deal ◽  
The United States ◽  
Political Orientation ◽  
World War ◽  
Narrative History ◽  
German Question ◽  
The Future

Schwarz's study Vom Reich zur Bundesrepublik is, in the opinion of this reviewer, the single most important book on the occupation studyperiod in Germany after World War II that has yet appeared. It is not an ordinary narrative history—indeed, it presupposes a good deal of prior knowledge—but is rather a topical analysis of the following problems: the various possible solutions to the German question in the years after 1945; the policies toward Germany of the four victorious powers—Russia, France, Britain, and the United States; the development of German attitudes on the future political orientation of one or two Germanies; and finally, the factors that led to the voluntary acceptance of Western integration by most West Germans even though this integration meant the partition of Germany.

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