Working Paper BETA #2021-11

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Auteur(s) : Andrea Borsato

Title : Does the Secular Stagnation hypothesis match with data? Evidence from USA

Abstract : The paper adds to the debate around Secular Stagnation in four ways. First, considering US historical data since 1870, the use of the term “Secular Stagnation” in the literature is misleading, since it should concern more long runs. Second, the slow growth in real GDP per capita experienced in more recent times represents a return to what US experienced before 1950. Third, we can speak about Secular Stagnation in terms of labour and multifactor productivity growth: their decline since the 1970s is not comparable to any previous period. In this sense, my findings provide views `a la Gordon (2015) and Hein (2016) with some support, but less to Summers (2014b) negative natural rate hypothesis, which suffers from theoretical weaknesses. Fourth, despite the several approaches often implemented, we trace out a complementary or even convergence in policy implications.

Key-words : Secular Stagnation, Negative interest rates, GDP and Productivity slowdown in growth.

JEL Classification : E20, E43, E50, E60, O11, O30, O40.