Secular Stagnation, Debt Overhang and Other Rationales for Sluggish Growth, Six Years On

31 Pages Posted: 22 Jan 2015

See all articles by Stephanie Lo

Stephanie Lo

Harvard University

Kenneth Rogoff

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 2015

Abstract

There is considerable controversy over why sluggish economic growth persists across many advanced economies six years after the onset of the financial crisis. Theories include a secular deficiency in aggregate demand, slowing innovation, adverse demographics, lingering policy uncertainty, post-crisis political fractionalisation, debt overhang, insufficient fiscal stimulus, excessive financial regulation, and some mix of all of the above. This paper surveys the alternative viewpoints. We argue that until significant pockets of private, external and public debt overhang further abate, the potential role of other headwinds to economic growth will be difficult to quantify.

Keywords: secular stagnation, debt overhang, deleveraging

JEL Classification: E32, E62

Suggested Citation

Lo, Stephanie and Rogoff, Kenneth S., Secular Stagnation, Debt Overhang and Other Rationales for Sluggish Growth, Six Years On (January 2015). BIS Working Paper No. 482. Available at SSRN: https://ssrn.com/abstract=2552574

Stephanie Lo (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Kenneth S. Rogoff

Harvard University - Department of Economics ( email )

Littauer Center
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United States
617-495-4022 (Phone)
617-495-7730 (Fax)

National Bureau of Economic Research (NBER)

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United States

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