Links: Secular Stagnation

Here are a dyad longer responses to Secular Stagnation, Progress inwards Economics", JW Mason looks at the points raised yesteryear Summers inwards detail. He views this every bit a positive pace inwards the dialogue inside mainstream economics.

In "Larry Summers, Secular Stagnation, in addition to the Crisis of the New Consensus Model", Mario Seccareccia is less charitable. He argues that close of Larry Summer's spoken communication is a re-hash of controversies inside economic science that were largely  dealt alongside simply subsequently the terminate of World War II. He feels that the "New Consensus" economical models (DSGE models) accept locked mainstream economists into a misleading involvement rate-centric globe view.

From the betoken of thought of the bond markets, this is an of import subject. The possibility that economical stagnation volition continue the policy charge per unit of measurement at zero good yesteryear 2015 has of import implications for the pricing of Treasury bonds.

I simply desire to comment hither on 1 smaller betoken of Larry Summers' spoken communication - the necessity of bubbles for the economic scheme to grow.  In the 1950's, Hyman Minsky argued that fiscal instability was a side-effect of increment inwards capitalist economies. It was alone exceptional circumstances inwards the early on postwar era that allowed increment thence to hap without fiscal instability. (I discussed this really of late inwards approximately other context inwards this post.) As such, in that place should hold out no surprise that to a greater extent than recent economical expansions accept coincided alongside bubbles.