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Secular Stagnation

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Alvin Hansen

Part of the book series: Great Thinkers in Economics ((GTE))

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Abstract

Secular stagnation is an unfortunate term, which would have been much better expressed in terms of a growing gap between actual, potential, or desired growth in a mature economy. Hansen was seeking long-term explanations and possible remedies to the problems of maintaining full employment in an advanced industrial economy in a period after an exceptional expansion. The nineteenth century had seen America transformed by territorial expansion, waves of immigration, and remarkable technological progress in industrialisation, urbanisation, and transportation (including the electricity, rail, and automotive sectors). What were to be the new drivers for the economy as these older sources diminished? America’s great productive power could be seen as both a blessing and a curse.

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Notes

  1. 1.

    see Backhouse and Boianovsky (2015).

  2. 2.

    ibid p. 315.

  3. 3.

    see also (1937d: 92).

  4. 4.

    Under the chairmanship of James F. Byrnes of South Carolina, the Special Committee to Investigate Unemployment and Relief (75A-F27) was established on June 10, 1937, to study, survey, and investigate the problems of unemployment and relief. Its work included studies of the total costs of public relief & assistance, Federal work programmes, and emergency public works for the period, 1933–7. It also examined the “security wage” in the Works Progress Administration (WPA) and encompassed an opinion poll on unemployment and relief policy and the impact of technology on unemployment.

  5. 5.

    1938d p. 959.

  6. 6.

    See also a short comment in 1928a: 300 on Wicksell’s emphasis on the divergence between the rates of interest and profit.

  7. 7.

    Hawtrey distinguished between the widening of capital, which simply reflected a general increase of capital at the same rate of use because of higher output, and a deepening of capital where more capital is used per unit of output.

  8. 8.

    See Barber (1987: 203n46).

  9. 9.

    For example, 1945c: 225n35, 1947: 35, 1949: 188–9, 1951: 162.

  10. 10.

    See Eccles Papers Box 100, Folder 1, Item 3: 1 Release S-10 - 5/15/39.

  11. 11.

    See Mehrling (1997: 97).

  12. 12.

    The report noted that whilst Paul Sweezy had written the chapters, they had been reviewed and criticised by Theodore Kreps of Stanford, Hansen, and Seymour Harris (1941a: 271n1,285n1).

  13. 13.

    ibid: 272n1.

  14. 14.

    ibid: 282–3.

  15. 15.

    Lynch (1946: 348).

  16. 16.

    Desmarais-Tremblay and Johnson (2019).

  17. 17.

    See Colander and Landreth (1996: 105–6128).

  18. 18.

    a prime pupil according to Brazelton (1989: 434) who quotes some of Hansen’s correspondence with Wright over Terborgh.

  19. 19.

    1946c, reprinted in (1947a: 298–306).

  20. 20.

    1951a: 191.

  21. 21.

    1957a: 24–8.

  22. 22.

    Hansen argued against this view in 1957b p. 113–4.

  23. 23.

    See also (1961b).

  24. 24.

    Speech, hosted by IMF, November 2013 outlined at larrysummers.com/2013/12/15/why-stagnation-might-prove-to-be-the-new-normal/ and Summers 2015 & 2016, see also the discussion in Backhouse and Boianovsky (2015).

  25. 25.

    Summers (2015, p. 64).

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    Robert J. Bigg

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Bigg, R.J. (2023). Secular Stagnation. In: Alvin Hansen. Great Thinkers in Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-42216-4_8

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