Writing in 2023, Olivier Blanchard of the Peterson Institute for International Economics noted that secular stagnation, a
Question:
Writing in 2023, Olivier Blanchard of the Peterson Institute for International Economics noted that “secular stagnation, a concept put forward by the economist Alvin Hansen in 1938, refers to economies suffering from structurally low private demand.” He also argued: “I believe that global secular stagnation was and is driven by deep structural factors that neither COVID nor inflation have done anything to reverse.”
a. What does Blanchard mean by “structurally low private demand”? Why might private demand be “structurally” low?
b. Why might structurally low private demand result in an economy suffering secular stagnation?
c. What are the “deep structural factors” that might result in the U.S. economy suffering from secular stagnation in future years?
Step by Step Answer:
a By structurally low private demand Blanchard is referring to a situation where the level of demand from private households and businesses in an economy is persistently low over a long period of time ...View the full answer
