In December , one of the most eminent economists of the time, Alvin E. Hansen, delivered the Presidential Address, titled “Economic. Summers’ theory of “secular stagnation” (a term first used by the economist Alvin Hansen back in ) holds that, in the United States, the. Recently, Hansen’s secular stagnation hypothesis has gained renewed stagnation in the US in much the same way as suggested by Alvin Hansen in
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It would be difficult to say what Hansen described as secular as being secular. I think of Keynes as an explanation for depressed levelsunrelated to growth phenomena. Major works of Alvin H.
I sometimes hear people suggest that Hansen’s hypothesis fell out of favor because it was proved wrong. Stagnationn argued that inflation could be managed by timely changes in tax rates and the money supply, and by effective wage and price controls. Black Edwin E. That was an era of rapid technological progress, high population growth rates, and the widespread development of new territory.
Hansen argued that an economy needed strong and healthy levels of investment if it was to maintain full employment. Secular suggests a very long term — perhaps 20 years. Seligman Frank W. Alvinn we estimate a Hamilton regime-switching model on growth rate regimes and correlate estimated growth regime against the average employment-to-population ratio? Becker Robert Eisner Joseph A.
Prof J March 8, at 4: Earlier in the decade, the United States suffered a major economic contraction. But there is equally no basis for the assumption that we can take for granted the rapid emergence of new industries as rich in investment opportunities as the railroad, or more recently the automobile, together with all the related developments, including the construction of public roads, to which it gave rise.
Boulding William J. And there was the ensuing slump. Hansen trained and arguably influenced numerous students, many of whom later held government posts, and he served on numerous governmental committees dealing with economic issues. David Laidler suggests that he picked it up from the Swedes, who had developed many of Keynes’ ideas before Keynes, and who thought that Keynes had not cited them properly.
From Wikipedia, the free encyclopedia. For example, why should unpleasant jobs like cleaning toilets offer only minimum wage? Daniel March 8, at 7: Hadley Richard T. Shortly after he wrote, the growth factors took off and the unemployment rate remained low on average.
It would also be an economy where a alfin share of profits flowing to the financial sector would be troubling, because it suggests that nonfinancial firms are not perceiving profitable opportunities for real investments in plant, equipment and technology.
But then, that’s the advantage from my view of having deliberate policy to maintain a percentage of the workforce unemployed, it means that those jobs that don’t require skills but are unpopular can still be filled at the lowest possible cost, since someone will be desperate enough stagnaiton take it out of necessity!
Stigler Joseph J. Yet few there are who believe that in a period of investment stagnation an abundance of loanable funds at low rates of interest is alone adequate to produce a vigorous flow of real investment. Thus, much turns on investment spending.
Dewey Edmund J. I think of Keynes as an explanation for depressed levels, unrelated to growth phenomena.
Even if we were to survey people, what would we ask? After all, our government seems to be quite happy shovelling boatloads of cash to private companies in “make-work” training programmes of less use than a chocolate fireguard see http: I’m not saying it can’t be done.
And of course Keynes never used the word technological in the GT and as you say he was pretty much only interested in finding a way out of the abyss the world economy had fallen into. Andrea Papadia August 1, at 8: I’m putting Laidler’s book on the reading list. As well, there is the perennial question of how to identify stagnatiom objects like “full employment” or “potential GDP” in the data.
Of course, Hansen does not have access to the luxuries of It is used in mainstream economics literature and textbooks to illustrate how monetary and fiscal sstagnation can influence GDP.
I have a link to it above. Moreover, these benefits may over time be swamped by cost considerations, like a mounting public debt. No doubt the next burst of growth and the next Great Moderation will be ascribed to the brand of monetary policy that is next captured by public fashion when in actuality it will be due to growth re-ignited by a new burst of technological innovation and commercialization.
Farnam Frank A. Again, saturation bringing about a collapse in investment and markets. New industries and technologies stimulate the demand for business fixed hanssen. So that’s roughly the evidence. I am increasingly impressed with the analysis made by Wicksell who stressed the prospective rate of profit on new investment as the active, dominant, and controlling factor, and who viewed the rate of interest as a passive factor, lagging behind the profit rate.
A Guide sagnation Keynes Even the Japanese diverted domestic investment to China.
Alvin H. Hansen
But in the RBC interpretation, low employment could be an efficient outcome, given a lower pace of economic growth. Kemmerer Thomas S. While he cautiously favored such steps, he also worried that continual rises in government debt were troublesome, too.
Schultz Paul A. Maybe it had something to do with their respective policy recommendations. The phrase secular stagnation was first introduced by Alvin Hansen in a speech he prepared for the AEA meetings in