Secular Stagnation at the ASSA meetings 2015 in Boston

Robert Hall’s session on “The Economics of Secular Stagnation” featured talks by Robert Gordon, Larry Summers and Barry Eichengreen as well as comments by Hall, William Nordhaus and Gregory Mankiw.

Not surprisingly, both Gordon (on the supply side) and Summers (on the demand side) identified signs of stagnation. Eichengreen didn’t; in his view only the price of investment goods displayed an unusual trend. Hall argued that the year 2000 marked a turning point: Since then, income per household stagnates as a consequence of falling labor supply by rich families and in particular, the teenagers in those families (they play video games instead). Nordhaus expected not stagnation but acceleration, due to breakthroughs in artificial intelligence. And Mankiw pointed out that negative real interest rates are the most normal thing in many economic models and not necessarily related to stagnation. Moreover, he argued that the job market pointed to the end of secular stagnation. He predicted the topic would no longer be debated a year from now.

Update (Feb 2015): Webcasts of this as well as other sessions (including on Piketty’s “Capital in the 21st Century”) are available here.