Secular Stagnation: The History of a Macroeconomic Heresy
European Journal of the History of Economic Thought, vol, 23 (6), 2016
36 Pages Posted: 5 May 2015 Last revised: 3 Jul 2016
Date Written: May 5, 2015
This paper covers the history of secular stagnation from Alvin's Hansen's AEA Presidential address in 1938 to the recent re-discovery of the idea by Lawrence Summers. It is argued that the story of secular stagnation is more complicated than the simple version usually told: the theory changed in ways that meant that, though its immediate relevance might be less, postwar prosperity left open the possibility that it might one day become relevant. It is also pointed out that the history of the term has never been free of political concerns, and it is suggested that changing conceptions of economic theory played an important role in the fate of secular stagnation.
Keywords: secular stagnation, unemployment equilibrium, Keynesian economics, Hansen
JEL Classification: B22, E12, E24, E32, E62
Suggested Citation: Suggested Citation