An Urban Agenda Against 'Secular Stagnation'

After three-plus years of slow growth, persistently high unemployment, and perennially low consumer confidence, former Treasury Secretary and Harvard economics professor Larry Summers has offered a diagnosis. Our economy, he says, is suffering from a chronic malady called “secular stagnation.”

Summers borrowed the term from another Harvard economist, Alvin Hansen, who used it to explain the Great Depression of the 1930s. Essentially, it means that in the absence of significant population growth, game-changing new technologies, territorial expansion, or a major war, our economy has ceased to grow. Only expansionary spending on the part of the federal government can keep it moving. Tyler Cowen has similarly warned that, having harvested the low-hanging fruits of technological innovation, the U.S. and other advanced nations are entering a “great stagnation.”