Handbook of Economic Stagnation

Handbook of Economic Stagnation

1st Edition - April 24, 2022

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  • Editors: Randall Wray, Flavia Dantas
  • Paperback ISBN: 9780128158982
  • eBook ISBN: 9780128162705

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Handbook of Economic Stagnation takes a broad view, including contributions from orthodox and heterodox economists who examine situations in countries and worldwide regions, including Japan and the Euro area. To be sure, stagnation is periodically relieved by short economic bursts usually brought on by unsustainable asset price bubbles. Once the bubbles burst, stagnation returns. This book's fresh, comprehensive approach to the topic makes it the premier source for anyone affected by these cycles.

Key Features

  • Synthesizes and organizes diverse perspectives about crisis economics and future economic growth
  • Emphasizes the relationships among stagnation, international economics, and the global distribution of labor
  • Includes Japan and the Euro zone as well as other countries and regions worldwide


Upper-division undergraduates through professionals working in macroeconomics and economic growth and development as well as related fields, such as microeconomics and economic theory

Table of Contents

  • Cover image
  • Title page
  • Table of Contents
  • Copyright
  • Contributors
  • Introduction: Handbook on economic stagnation
  • Overview of the contributions to this volume
  • Part A. Secular stagnation: theory, causes, and evidence
  • Chapter One. Stagnation policy: a Steindlian perspective
  • Introduction
  • A Steindlian model of distribution and growth
  • The channels of stagnation policy and implications for its reversal
  • Conclusions
  • Chapter Two. Growth and stagnation in mature and dual economies
  • Introduction
  • Mature economies, functional finance, and secular stagnation
  • Dual economies and structural transformation
  • Two cases: Japan and Brazil
  • Chapter Three. The secular stagnation of productivity growth
  • The ‘slow-moving turtle’
  • Potential output growth and productivity growth
  • Total-factor-productivity (TFP) growth: solow variations
  • Bringing demand in from the cold
  • Wage growth as a determinant of productivity growth
  • Conclusion: weak demand growth pulls down potential output growth
  • Chapter Four. Stagnation and social structures of accumulation
  • Introduction
  • Social structure of accumulation theory and stagnation
  • History of SSAs in the United States
  • The neoliberal SSA and stagnation in the U.S.
  • Data analysis
  • Concluding comments
  • Chapter Five. Financialization and stagnation—a macroeconomic regime perspective
  • Introduction
  • The concept of macroeconomic regimes under financialization
  • The regimes before the crisis
  • Changes in the regimes in the course of and after the crisis
  • Challenges: imbalances, instability, and stagnation
  • Conclusions
  • Chapter Six. Hyman Minsky meets secular stagnation
  • The microfoundations of Minsky's theory of investment
  • From microeconomic investment to macroeconomic instability
  • Seeds of a Minsky crisis in the household sector
  • Weak recovery, rising inequality, and secular stagnation
  • Conclusion
  • Chapter Seven. Demand, distribution, productivity, structural change, and (secular?) stagnation
  • Introduction
  • Neoclassical explanations of secular stagnation
  • Demand effects
  • Income distribution
  • Endogenous technical change
  • Monopoly capital and financialization
  • Instead of conclusion: stagnation, is it secular?
  • Chapter Eight. Economic stagnation in the Euro Area
  • Preface
  • Secular growth slowdown in the Euro Area: evidence
  • A short digression: the slowdown of private consumption growth is linked to the slowdown of growth of fixed capital formation
  • Falling wage shares: not quite a “natural development”
  • A somewhat longer digression: supply side developments unlikely to have underlain stagnating output growth
  • The noxious of restrictive EU fiscal policy rules and the common monetary policy
  • Real effective exchange rate of Germany's EA partners: from relative appreciation to relative depreciation
  • The limits of “internal devaluation”
  • Suppression of fiscal deficits critically contributing to stagnant EA output growth
  • The future remains uncertain
  • Part B. Secular stagnation in the global south
  • Chapter Nine. Inequality, stagnation, financialization, and the Global South
  • Introduction
  • Inequality, stagnation, and financialization
  • Spillovers to the Global South
  • External vulnerabilities of EMEs
  • Resource transfers
  • Conclusions
  • Chapter Ten. Does the liberal policy regime condemn Latin America to quasi-stagnation?
  • Introduction
  • First, nonconsolidated industrial development
  • Second, growth with foreign savings
  • Third, anchor to control inflation
  • Fourth, high level interest rate
  • Fifth, neutralization of the Dutch disease
  • Sixth, capital controls
  • Seventh, industrial policy
  • Eighth, public savings
  • Conclusion
  • Chapter Eleven. Mexico: unequal integration and “stabilizing stagnation”
  • Dedication
  • Introduction
  • The growth slowdown in Mexico
  • Alternative explanations for Mexico's slow growth
  • Conclusions
  • Chapter Twelve. The stagnation of the Mexican economy is here to stay
  • Macroeconomic policies for maintaining “stability” are detrimental to endogenous conditions for growth
  • Stability of the exchange rate does not allow for flexibility of economic policies to foster growth
  • The government's policy for stabilizing the exchange rate, and for lowering inflation, the fiscal deficit, and the amount of debt has brought about economic stagnation that will end in recession and crisis
  • The fiscal and taxation policy
  • The government will not succeed in reducing the amount of debt by reducing public spending
  • Trade agreements have not been favorable toward economic growth
  • Income inequality is harmful to economic growth
  • Public investment is falling, and there is insufficient internal and external demand for growth
  • There is no countercyclical fiscal policy
  • Lower economic growth potential is detrimental to job creation, salaries, and the public wellbeing
  • Deceleration of the world economy
  • The fragility of the economy when it depends upon capital inflows
  • The Mexican economy has neither productive conditions, nor the economic-policy management needed to deal with external shocks
  • The impossibility of continuing with the predominating neoliberal policy
  • The need to operate with a flexible exchange rate
  • Mexico needs a fiscal deficit that favors the productive sector to adjust the external deficit and drive the dynamics of the economy
  • Chapter Thirteen. The Brazilian economic recession and stagnation and an Agenda to ensure macroeconomic stability and social development
  • Introduction
  • Chronicle of a crisis foretold
  • An Agenda for the Brazilian economy
  • Conclusion
  • Part C. The return of big government and economic prospects after the pandemic
  • Chapter Fourteen. The role of big government: an introduction
  • The Domar problem and secular stagnation since 1910!
  • Conclusion
  • Chapter Fifteen. Secular stagnation: as good as it gets?
  • Introduction
  • Secular stagnation and labor productivity growth
  • Growth decomposition: productivity as a residual
  • The role played by stagnation of wages
  • Labor markets—the demand side
  • Evidence from the experience of prime age workers
  • The way forward
  • Chapter Sixteen. Secular stagnation and the age of ultra-low interest rates
  • Interest rates over the past century
  • Secular stagnation and interest rates
  • Implications
  • Chapter Seventeen. Monetary policy after the subprime crisis: a Post-Keynesian critique
  • Introduction
  • Unconventional monetary policy after the crisis
  • Mainstream theory reconsideration of monetary policy after the GFC
  • A Post-Keynesian alternative on the role of the Central Bank
  • Concluding remarks
  • Chapter Eighteen. Biden's build back better proposal and the future of secular stagnation
  • Introduction
  • Building back better: the plan(s)
  • Should we raise taxes to pay for spending? An alternative view of taxation
  • Will the spending be inflationary if not paid for?
  • Conclusion
  • Index

Product details

  • No. of pages: 430
  • Language: English
  • Copyright: © Academic Press 2022
  • Published: April 24, 2022
  • Imprint: Academic Press
  • Paperback ISBN: 9780128158982
  • eBook ISBN: 9780128162705

About the Editors

Randall Wray

L. Randall Wray is a professor of Economics at Bard College and Senior Scholar at the Levy Economics Institute. Wray taught at the University of Missouri–Kansas City from 1999 to 2016 and at the University of Denver from 1987 to 1999, and has been a visiting professor at the Universities of Paris and Rome (La Sapienza), as well as holding a variety of visiting positions in China, the Czech Republic, Brazil, Mexico, and Italy. From 1994 to 1995 he was a Fulbright Scholar at the University of Bologna, and he has recently completed a Fulbright Specialist Grant at the Tallinn University of Technology in Estonia. He has had a number of funded research grants from the Ford Foundation, from the Asian Development Bank, and from the Institute for New Economic Thinking. He holds a BA from the University of the Pacific and an MA and a Ph.D. from Washington University, where he was a student of Minsky. His recent publications include: A Great Leap Forward: Heterodox Economic Policy for the 21st Century; Macroeconomics; “MMT and Two Paths to Big Deficits”, Challenge; “Cranks and heretics: the importance of an analytical framework” Cambridge Journal of Economics; Why Minsky Matters: An Introduction to the Work of a Maverick Economist; and Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. His books have been published in many languages, including Chinese, Spanish, Portuguese, Ukrainian, and Japanese.

Affiliations and Expertise

Levy Economics Institute of Bard College, USA

Flavia Dantas

Flavia Dantas is an Associate Professor at SUNY Cortland, where she teaches courses in alternative economic theory, political economy and social thought, macroeconomics, money, and mathematical economics. She received her Ph.D. from the University of Missouri-Kansas City in 2013. Her current work focuses on economic stagnation, employment policy, and financial globalization. Recently she has been working with Randall Wray to examine labor market trends in the USA; extensions of this work will critically assess what many have called a new era of “secular stagnation”.

Affiliations and Expertise

Economics Department, State University of New York, Cortland, USA

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