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- Title
SECULAR STAGNATION: IS IT IN THE DATA?
- Authors
KIRIKOS, DIMITRIS G.
- Abstract
The anemic recovery of advanced economies, after eight years into the great recession, has recently been attributed to the persistent slump in demand and its effects on long-run growth rates through hysteresis effects. If adverse secular trends are at work, then the data should show that the long-run growth rate has shifted to a lower level. Hence, using a simple Markov switching regimes model, we investigate whether the growth rate of potential GDP has exhibited a persistent switch, based on OECD data for nine economies over the period 1990-2017. It turns out that, in all cases, potential GDP growth is characterized by switching dynamics and this provides necessary evidence that secular stagnation cannot be ruled out empirically.
- Subjects
OECD countries; STAGNATION (Economics); ORGANISATION for Economic Co-operation &; Development; GROSS domestic product; RECESSIONS; MARKOV processes; HYSTERESIS (Economics); ECONOMIC history
- Publication
International Economics / Economia Internazionale, 2017, Vol 70, Issue 4, p411
- ISSN
0012-981X
- Publication type
Article