Secular stagnation: the history of a macroeconomic heresy

Roger Backhouse, Mauro Boianovsky

Research output: Contribution to journalArticlepeer-review

26 Citations (Scopus)
303 Downloads (Pure)

Abstract

The paper presents a history of the concept of “secular stagnation”, from Alvin
Hansen in the 1930s and 1940s to its recent revival by Larry Summers. We examine Hansen’s ideas and those of young economists associated with him, notably Evsey Domar, Everett Hagen, Benjamin Higgins, Alan Sweezy and Paul Samuelson, who were the economists who kept the doctrine alive in the 1950s and to whom Summers and others taking up the idea recently turned. Their ideas are contrasted with the theories of stagnation associated with Josef Steindl and Joseph Schumpeter. It is a label for a historical thesis about the American
economy, which, initially seen as distinct from Keynes General Theory, came to be seen as a theoretical proposition based on Keynesian theory. It is argued that the idea of secular stagnation had a political dimension, connected to the New Deal and the Cold War and changing conceptions of economic maturity.
Original languageEnglish
Pages (from-to)946-970
JournalEuropean Journal of the History of Economic Thought
Volume23
Issue number6
Early online date2 Jun 2016
DOIs
Publication statusPublished - 2016

Keywords

  • Secular stagnation
  • economic maturity
  • unemployment equilibrium
  • population growth
  • negative natural rate of interest

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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