Turning Over the Cube

We crave narrative. It’s in the nature if things that, at any given moment, there should be a conventional wisdom about what to expect in the years ahead.  Get ready, therefore, for an extended discussion of whether “secular stagnation” will become the prevailing economic forecast of the present day, replacing “crisis,” and, before that, “the great moderation.” Lawrence Summers, of Harvard University, broached the possibility two weeks ago during a panel discussion at a research conference of the International Monetary Fund.

His remarks were quickly amplified by Martin Wolf, of the Financial Times, and Paul Krugman, of The New York Times, with Krugman musing  that perhaps he had been first to mention first the possibility that “the weirdness in the current situation may go on much longer than anyone imagines.”  John Taylor, of Stanford University, weighed in here to doubt them both.

Ordinarily, such a diagnosis would require a paper, or at least a printed transcript.  He spoke about the topic last month at a conference sponsored by the Brookings and Hoover Institutions as well, so eventually there will be a text. His new webpage is worth watching. Summers is a veteran wagerer, and now the peripatetic professor is turning over the doubling cube once again.  He gave a distinguished lecture in July about implications of the advent computer for the structure of society. He told Fortune that he has begun working on a book.

So is Economic Principals.  And however contagious the topic may be, secular stagnation requires a little more work. The analysis that very low interest rates might fail to stimulate demand hasn’t been around since the years just after World War II. Read the competition if you like.  EP is traveling and not writing this week.  Happy holidays!

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