Kozlowski, Julian, Veldkamp, Laura, Venkateswaran, Venky, (2016), “The tail that wags the economy: The origin of secular stagnation”, VoxEu, 11 September
The Great Recession has had long-lasting effects on credit markets, employment, and output. This column combines a model with macroeconomic data to measure how the recession has changed beliefs about the possibility of future crises. According to the model, the estimated change in sentiment correlates with economic activity. A short-lived financial crisis can trigger long-lived shifts in expectations, which in turn can trigger secular stagnation.
Relevant Posts
- De Grauwe, P. (2015) “Secular stagnation in the Eurozone”, VoxEU Organisation, 30 January
- Spence, Michael, (2016), “How to Fight Secular Stagnation”, Project Syndicate, 31 August