Handbook of Economic Stagnation

Chapter Fifteen: Secular stagnation

as good as it gets?

Flavia Dantas ¹ , and L. Randall Wray ^{2       1} Economics Department, State University of New York, Cortland, NY, United States      ² Economics, Levy Economics Institute and Bard College, Annandale-on-Hudson, NY, United States

Abstract

This chapter looks closely at U.S. labor markets to examine secular stagnation in the U.S. We argue against the commonly held view that slow growth in the U.S. results from slow productivity growth and slow growth of inputs to production—especially the labor force. Instead, evidence from U.S. labor markets shows that the main problem is chronic insufficient growth of aggregate demand. We focus on two slow growth episodes experienced by the US economy ...