Working Paper: CEPR ID: DP10974
Authors: Kevin Hjortshøj O'Rourke
Abstract: The paper looks at the development of the secular stagnation thesis, in the context of the economic history of the time. It explores some 19th century antecedents of the thesis, before turning to its interwar development. Not only Alvin Hansen, but Keynes and Hicks were involved in the conversations that led to Hansen's eventual statement of the thesis that we are familiar with. The argument made sense in the context of the interwar period, but more so in Britain than the US.
Keywords: Alvin Hansen; Economic History; History of Economic Thought; Keynes and Secular Stagnation
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| insufficient aggregate demand (E00) | persistent unemployment (J64) |
| changes in population growth (J11) | investment demand (E20) |
| technological progress (O33) | investment demand (E20) |
| investment demand (E20) | aggregate demand (E00) |
| aggregate demand (E00) | employment levels (J23) |
| low investment demand (E22) | negative equilibrium interest rate (E43) |
| negative equilibrium interest rate (E43) | inability of central banks to stimulate the economy (E58) |
| persistent unemployment (J64) | insufficient investment demand (E22) |