HKS Authors

See citation below for complete author information.

Frank and Denie Weil Director of the Mossavar-Rahmani Center for Business and Government
Charles W. Eliot University Professor


Secular stagnation theory has developed substantially recently and offers substantial insights that policymakers have yet to fully internalize. This paper reviews the considerations that led me to revive the secular stagnation idea, summarizes the theory as I understand it today, and argues that events since I started advocating the secular stagnation view have tended to confirm its predictions and reject those of its critics. It addresses the various objections, both theoretical and empirical, that have been put forward to the secular stagnation idea, and argues that if secular stagnation is a central macroeconomic issue, much of the conventional wisdom regarding macroeconomic policy needs to be rethought. Contrary to current orthodoxy, monetary policies may be able to have lasting impacts on levels of output but not to determine rates of inflation. Fiscal policies may be essential for assuring full employment and financial stability. Increases in government indebtedness may contribute to financial stability.


Summers, Lawrence H. "Secular Stagnation and Macroeconomic Policy." IMF Economic Review 66.2 (June 2018): 226–250.