HKS Affiliated Authors
Frank and Denie Weil Director of the Mossavar-Rahmani Center for Business and Government
Charles W. Eliot University Professor
Excerpt
Excerpt
Reflections on the ‘New Secular Stagnation Hypothesis’. Lawrence Summers, 2014, Book Chapter within the book Secular Stagnation: facts, causes and cures. "The Great Recession has cast doubt on the idea that, with or without policy intervention, the workings of the market will eventually eliminate output gaps. This chapter explains why a decline in the full-employment real interest rate (FERIR) coupled with low inflation could indefinitely prevent the attainment of full employment. A variety of factors suggest that the FERIR has declined substantially over the last several decades in the industrial world..." Link