Secular stagnation

The prospect of a permanent slowdown has recently acquired more likelihood and is now taking a widening place in the economic and policy debate, following Robert Gordon’s (2012) influential contribution. The scenarios based on this assumption are fairly worrisome not only because they announce a bleak future but also because they require an in-depth reconsideration of private agents’ strategies as well as of government policies. As forcefully stated by Larry Summers, today’s issue is not to stabilize around a given potential trend but how to avoid stagnation. To this respect a number of problems arise concerning fiscal and monetary policy in the medium term, and development strategy and environment in the long term. A persistent slow growth will certainly require significant adjustments in the labor market. In particular it is important to find out the sectors which are likely to provide future jobs in an increasingly computerized economy. I also propose a discussion of the main consequences of the dramatic climate change we may have to face earlier than expected, always taking into account both the private sector and the government’s point of view.  No doubt that the economists will have to contribute to a challenging debate that spreads much farther from the conventional fields and requires renewed ways of thinking.   


 Topics for discussion will be the.


1. Zero growth thesis, old and new tales: a review.

Gordon’s pessimism is not new. It is in line with the classical stationary state of Malthus, John Stuart Mill and Ricardo. In the seventies the report of the Club of Rome provides a first modern systemic approach to environmental constraints.  More recently, a debate came out after a string of disappointing outturns (see Teulings & Baldwins ,2014).

2. Global growth and convergence.

Is slow growth in developed countries a side effect of convergence and will there still be a potential for reducing inequality in the coming years?  Evidence is mixed : there is also some signs of a slowdown of emerging countries, particular in China.       

3. Sharing economy and collaborative consumption.

Consumers are pulled out of formal trading by powerful computer search programs which help matching supply and demand and reducing unused capacity. Sharing equipments, cars, tools that were not used most of the time may expand supply at zero marginal cost. Calling consumers for some sort of collaboration allows reducing prices. Will all these innovations change the face of capitalism (Rifkin, 2014)   


Other issues may be considered :

4. Return to full employment: how and when?

5. Rising debt and falling growth: old and new tenets on debt issues (Reinhart & Rogoff, 2011)

6. Global slowdown and global warming

7. Start ups (and downs): entrepreneurship in faltering perspective