The debate between Joe Stiglitz and Larry Summers over secular stagnation is a somewhat embarrassing affair, which I hope will soon be forgotten. Joe, one of our greatest living economists, seems to have misunderstood what secular stagnation means – which is, to be fair, easy given how unintuitive the term is. And he accused Larry of inventing the doctrine to justify the Obama administration’s policy shortfalls. Secular stagnation means that situations like 2008-16, in which monetary policy alone can’t restore full employment, should be seen as highly likely and maybe the norm. And can we talk about more interesting implications of the economy’s apparent need for low real interest rates on average?

Source: New York Times September 11, 2018 16:18 UTC