Working Paper: NBER ID: w21807
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: No keywords provided
JEL Codes: B22; N10
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) |
| low investment demand (E22) | lower aggregate demand (E19) |
| lower aggregate demand (E19) | higher unemployment (J64) |
| population growth slows (J11) | decline in investment demand (E22) |
| decline in investment demand (E22) | higher equilibrium unemployment rate (J64) |
| capital accumulation increases (E22) | diminishing marginal efficiency of capital (E22) |
| diminishing marginal efficiency of capital (E22) | lower returns on investment (G11) |
| technological progress (O33) | increase in investment demand (E22) |
| population growth (J11) | increase in investment demand (E22) |