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Austerity is Defunct

Long-term stagnation is a real possibility

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Posted in Contemporary economics Tagged with: , , ,

Sluggish economic growth has generated a number of catch phrases to describe the collective experience – “lost” decades, secular stagnation, the Japanese disease.  There can be little doubt that the US has been living through such a period.  The expansion since June 2009, the trough of the last recession, is nearing the record set in the 1990s, 120 months, but no one will mistake the last ten years for the wild and wooly Nineties. True, the unemployment rate is today very low. But GNP growth itself has been sub-par, wages have risen only slowly, interest rates have remained low, inflation