Not that it really needed it, but the debate over “secular stagnation” has been rekindled in recent days by a new paper(.pdf) by economists Gauti Eggertsson and Neil Mehrotra of Brown University that, basically, says we’ve got to save less and spend more if we’re going to achieve higher growth during a period when population growth is slowing and inequality is rising. Higher rates of inflation and more government debt is also encouraged.
Here’s Eggertson talking to the folks at CNBC a few days ago.
After he looked at the paper, Mohamed El-Erian penned this Bloomberg commentary that concluded today’s economists are, basically, lost at sea with no real idea or consensus about what caused the recent poor economic performance or what to do about it.
