Must-Read: Gauti Eggertsson and Lawrence Summers: How Secular Stagnation Spreads and How It Can Be Cured

Must-Read: Gauti Eggertsson and Lawrence Summers: How Secular Stagnation Spreads and How It Can Be Cured:

The secular stagnation hypothesis suggests that low interest rates may be the new normal in years to come….

This prospect should not only lead to a major rethinking of policy from the perspective of individual economies, but also a major rethinking about monetary and fiscal policy in the international context, the role of international capital flows, and the role of policy coordination across borders. In times of secular stagnation, events such as Brexit or the recent turbulence in Turkey have much larger spillover effects than under normal circumstances.