Economic Impossibilities for our Grandchildren?
The paper looks at the development of the secular stagnation thesis, in the context of the economic history of the time. It explores some 19th century antecedents of the thesis, before turning to its interwar development. Not only Alvin Hansen, but Keynes and Hicks were involved in the conversations that led to Hansen's eventual statement of the thesis that we are familiar with. The argument made sense in the context of the interwar period, but more so in Britain than the US.
This is a revised version of the Keynes Lecture, presented at the British Academy on October 7, 2015. I am extremely grateful to Mary Morgan who chaired that event, and to Roger Backhouse, Patrick O’Brien, Richard Portes, Morten Ravn, Hélène Rey, and Donald Winch, who attended the lecture and made many useful suggestions and comments. I particularly want to thank Morgan Kelly and Alan Taylor for many conversations on the subject of secular stagnation; and to Bob Allen, Charlie Bean, Paul Beaudry, Agustín Bénétrix, Steve Broadberry, Nick Crafts, Brad DeLong, Rui Esteves, Ron Findlay, Mike Gavin, Richard Grossman, Leander Heldring, Svend Hylleberg, Philip Lane, Jacob Madsen, Perry Mehrling, Gian Maria Milesi-Ferretti, Cormac Ó Gráda, Thomas Piketty, Filipa Sa, Claus Vastrup, Karl Whelan, Jeff Williamson, and Nikolaus Wolf, for many useful comments, help with data, and advice. The usual disclaimer applies. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.