Monthly CFM Survey: Secular Stagnation, Centre for Macroeconomic Survey, 03 Οκτωβρίου 2014.
This month’s questions concern the revival of interest in the idea of secular stagnation. The survey was conducted in the last week of September. A full list of written responses from our panel of experts can be found here. Only 24% (27% if we weigh by confidence) of respondents think that the Western economies have entered a period of secular stagnation. Indeed, several panel members question whether secular stagnation is a useful and well-defined concept and this may explain the lack of strong views on either side. Despite some ambivalence to the idea of secular stagnation, the number of respondents who think that policies should be more concerned about low real interest rates is substantially higher than the number that do not.
The idea of secular stagnation
Over seven years since the collapse of the interbank market and nearly six years after the collapse of Lehman Brothers, the global financial crisis is still with us and the recovery does not quite seem secure. Despite years of extraordinarily low policy interest rates, increases in public debt and unconventional monetary policies, few advanced economies have secured the kind of growth that characterised the post-war growth experience. Larry Summers (2013) has suggested that the lack of response to these policy stimuli might imply that a secular stagflation may have taken hold.[1]
For this month’s CFM survey, we provided a simple outline of what we think the hypothesis entails and then first asked respondents to consider whether they thought the major advanced economies (the US, the UK and the euro area) have recently entered a phase of secular stagnation.[2] We then asked respondents to give an opinion on whether the natural rate of interest is currently negative and thus whether further policy stimulus is required.
Σχετικές αναρτήσεις:
- Teulings, C. & Baldwin, R. (2014) “Secular stagnation: Facts, causes, and cures“, VoxEU Organisation Books, 15 Αυγούστου.
- Borio, C. & Disyatat, P. (2014) “Low interest rates and secular stagnation: Is debt a missing link?“, VoxEU Organisation, 25 Ιουνίου.
- Fatas, A. (2013) “Debt and secular stagnation“, Antonia Fatas on the Global Economy Blog, 10 December.