Talk:Economic stagnation

Untitled

Recession means production will be their in the economy at the same time demand will not be their it is not means that economy is not having purhasing power but economy is not willing to buy. For example it is cycle producer-consumer-man power(prodcr/consmr) because of inflation prices will rise it is going to effect consumer, so consumers needs more money so they demands more wage,and it once again makes more proction cost and producer will be in presure to rise his products cost. It is also one of the face of recession or part only.

Rename page?

This page is 90% about economic stagnation in the US. it either needs expanding with more detail I think or just relabeled. — Preceding unsigned comment added by 204.239.12.181 (talk) 21:02, 1 October 2014 (UTC)

I agree that content should probably be split into economic stagnation in the United States. --_{Piotr Konieczny aka Prokonsul Piotrus| reply here} 03:52, 5 May 2016 (UTC)

The Japanese economy has experienced stagnation since 1989-90. Lessons From Japan's Secular StagnationPhmoreno (talk) 02:58, 16 May 2016 (UTC)

If anyone is interested in contributing to a Japanese stagnation section there are a significant number of high quality publications available including several from respected journals and publishers.Phmoreno (talk)

Economic or secular stagnation?

The entire theory section uses the term "secular stagnation" (which redirects here), through this term is not mentioned in the lead. Shouldn't this article be renamed accordingly? Or is secular stagnation different from economic stagnation? --_{Piotr Konieczny aka Prokonsul Piotrus| reply here} 03:52, 5 May 2016 (UTC)

Re this citation request, the quoted phrase in question is from [1] where it is attributed as the opinion of "a band of economists - the most prominent is Larry Summers, the former Treasury secretary - who argue the economy is also suffering from a chronic disease that they call secular stagnation." Summers has a personal vested interest in explanations that the U.S. economy is stagnating because he has been one of the most vocal advocates of anti-growth, supply-side, trickle-down, inequality-causing policies during the past seven years. Therefore he and his cadre are not reliable sources on the topic. "Secular stagnation" is just one theory of economic stagnation which is always expounded after every recession and has never been correct. However, this time may be different.

Therefore this article is not currently based on reliable sources, and is so misleading as to be worthy of deletion unless someone has time to base it on reliable reviews such as [2] ("In all the theories reviewed above, technological progress drives structural change, but it is frequently the demand side that is crucial for determining which industries grow faster than others and which shrink, and it therefore shapes the direction of structural change.") and [3] for international perspectives, and [4] for balance on the reliability of the secular stagnation hypothesis. EllenCT (talk) 13:51, 8 May 2016 (UTC)

This is a completely erroneous description of Summers' work or beliefs. And even if it was true it would not create a "vested interest", whatever that is. EllenCT, it looks like you're trying to insert your own opinion (incorrect one at that) of Summers here.Volunteer Marek (talk) 03:42, 25 May 2016 (UTC)

Where do any of these articles mention stagnation?Phmoreno (talk) 02:07, 9 May 2016 (UTC)

Did you read them? Did you read [5]? EllenCT (talk) 02:29, 9 May 2016 (UTC)

Larry Summers and the "band of economist" are valid sources per Wikipedia policy. Your opinion of their policies or their articles discussing stagnation is not sufficient reason to call this content "worthy of deletion" or for "factual accuracy" and "disputed" tags. If you have reliable sources that say something different then accurately summarize them and add the content along with the references, however; make sure that it addresses the issue of stagnation. Phmoreno (talk) 17:29, 9 May 2016 (UTC)

Are you serious? Where in the reliable source criteria do you see any evidence that the opinions of self-interested, involved parties are reliable in any way? Is there an actual peer reviewed literature review that agrees with any of your opinions? All of the references I've provided specifically discuss the observations of, effects of, and causes of stagnation. Please do not remove dispute tags until the dispute is resolved. EllenCT (talk) 10:21, 10 May 2016 (UTC)

I added sections below for you to clarify your reasoning. The wording of various disputed sections is very straight forward and matter of factual. The sources are published and reliable. If you have sources that say something different then you are most welcome to truthfully post statements enlightening the understanding of stagnation.Phmoreno (talk) 13:25, 10 May 2016 (UTC)

Do you agree with the reliable source criteria that the peer reviewed literature reviews are more reliable than the opinions of interested parties published in editorial format? EllenCT (talk) 15:42, 10 May 2016 (UTC)

Peer reviewed sources are not required by Wikipedia policy, and yes I have several in my files. How many do you have to support your claims?Phmoreno (talk) 12:07, 16 May 2016 (UTC)

"Secular stagnation" should probably be a separate article.Volunteer Marek (talk) 03:40, 25 May 2016 (UTC)

Factual accuracy tag

Be specific as to which sections and statements this applies.Phmoreno (talk) 02:02, 9 May 2016 (UTC)

Your presentation of secular stagnation theory, which has never held true historically, presents a factually inaccurate description of economic stagnation to the readers who would be far better served by the analysis of deficits in aggregate demand associated with economic inequality. EllenCT (talk) 15:44, 10 May 2016 (UTC)

The first sentence of one of your above citation reads: Recent studies warn that the U.S. economy may return to a phase of secular stagnation. This is counter to your "never held true" claim. The second part of your statement is original research /synthesis.Phmoreno (talk) 01:00, 16 May 2016 (UTC)

Secular stagnation theory "disputed neutrality"

What is the reason for the "disputed neutrality" tag in this section? It's hard for me to understand how a the explanation theory that originated and was written about in the 1930s by relatively contemporary sources is non neutral. Be specific.Phmoreno (talk) 12:52, 10 May 2016 (UTC)

The literature review at [6] clearly indicates that there is no historical support for secular stagnation theory, and says why. Your attempt to present it as a prominent explanation because you want to avoid the fact that the lack of gross private domestic investment brought about by income inequality is a far greater influence on economic growth than supply-side theories about insufficient new technologies. The skyrocketing cost of education under rampant and sustained income inequality leads to the insufficiency of the application of existing technologies. EllenCT (talk) 15:48, 10 May 2016 (UTC)

1. that there is no historical support for secular stagnation theory Your own citations refute your claim.Phmoreno (talk) 01:14, 16 May 2016 (UTC) There are more articles and papers on the economic stagnation / secular stagnation of Japan than anyone would ever have time to read.Phmoreno (talk) 12:23, 16 May 2016 (UTC)

2 The rest of your statement is original research / synthesis.Phmoreno (talk) 01:31, 16 May 2016 (UTC)

You still need to be specific as to which citations you are questioning.Phmoreno (talk) 00:36, 17 May 2016 (UTC)

The literature review at [7] clearly indicates that there is no historical support for secular stagnation theory, and says why. Your attempt to present it as a prominent explanation because you want to avoid the fact that the lack of gross private domestic investment brought about by income inequality is a far greater influence on economic growth than supply-side theories about insufficient new technologies. The skyrocketing cost of education under rampant and sustained income inequality leads to the insufficiency of the application of existing technologies. EllenCT (talk) 15:48, 10 May 2016 (UTC)

EllenCT can you point out specifically where this source "indicates that there is no historical support for secular stagnation theory" and also explain why that would be relevant? Volunteer Marek (talk) 03:45, 25 May 2016 (UTC)

In the third through fifth sentences of its abstract! Did you even read it? EllenCT (talk) 11:27, 25 May 2016 (UTC)

Yes I did read it. And no, that does not say "there is no historical support for secular stagnation theory". In fact the claim you're making doesn't really make sense.Volunteer Marek (talk) 14:53, 25 May 2016 (UTC)

Citation needed tags in lede

Please do not put tags in lede requesting citations for information that is clearly referenced in the article. In the case of the number of recent books and articles on stagnation this kind of tagging is not just offensive but ignorant.Phmoreno (talk) 12:56, 10 May 2016 (UTC)

There is no guideline or policy which agrees with your opinion. While redundant citations are not always strictly required in article introductions, there is no restriction on asking that unsourced statements be cited anywhere they appear, including in article introductions. If none are forthcoming, the uncited statements may be removed. EllenCT (talk) 16:21, 10 May 2016 (UTC)

Secular stagnation term used for recent economy "non neutrality" tag

That section discusses recent usage of the term and is adequately referenced. I don't see anything in that section that could be considered "non-neutral". Please explain how the recent usage of "stagnation" in the cited articles reflects non-neutrality.Phmoreno (talk) 13:03, 10 May 2016 (UTC)

See #Secular stagnation theory "disputed neutrality" above. EllenCT (talk) 15:50, 10 May 2016 (UTC)

Secular theory position in article

This section should immediately follow the lede because it explains contains an explanation of the concept and other fundamental information.Phmoreno (talk) 16:26, 10 May 2016 (UTC)

We have a literature review indicating that it has never held true. Are there any [peer] reviewed literature reviews in support of it? If not, then it should be deleted.

Furthermore, it has never been applied to non-U.S. economies, has it? EllenCT (talk) 16:29, 10 May 2016 (UTC)

Whether true or not it is a matter of historical record and has been addressed by numerous leading economists listed herein. And your statement about per [sic] reviews is total nonsense because of stagnation's discussion in various widely cited books and articles, only a few of which are referenced herein.Phmoreno (talk) 16:40, 10 May 2016 (UTC)

Are there any peer reviewed literature reviews in support of the secular stagnation hypothesis? Has the term ever been applied to economies outside the US? EllenCT (talk) 19:25, 10 May 2016 (UTC)

1. If you mean "are there any literature reviews that prove secular stagnation?", well, then it wouldn't be a hypothesis would it? The purpose of the article is to explain what the hypothesis is and the debates around it, past and present. Secondary peer reviewed literature is not necessary to establish most or the important points. These can be found in a large number of published and reliable secondary and tertiary sources, acceptable by Wikipedia:Identifying reliable sources (EllenCT is frequently reminded of this policy. Asking for "secondary peer reviewed sources" is one of her favorite diversionary tactics.)Phmoreno (talk) 02:12, 16 May 2016 (UTC)

2. Japan has experienced economic stagnation since 1989. [8]Phmoreno (talk) 03:01, 16 May 2016 (UTC)

Notice to EllenCT You changed the order of the article to something irrational without ever providing a sensible explanation!Phmoreno (talk) 02:35, 16 May 2016 (UTC)

As I mentioned above, I think secular stagnation should have its own article. This article should actually be just a short description of the phenomenon.Volunteer Marek (talk) 03:51, 25 May 2016 (UTC)

Revision in progress

I will be revising Economic stagnation and will include a reference to the an opposing theory related to income inequality. I will be working on this over a period of several days, possibly a couple of weeks. I will do my best to address well thought through concerns, especially ones that show knowledge of the subject matter.

Disruptive edits will be reported to the administrators notification board. Time-wasting comments will be ignored. By time-wasting comments I am referring to: comments that are off topic or are not expressed in a way that they can be construed to relate to the topic, asking questions that are already answered in the article, citing marginally related sources, misrepresenting sources or making an original research / synthesis from sources.Phmoreno (talk) 02:55, 11 May 2016 (UTC)

Your continued attempts to try to push secular stagnation theory requires support in WP:SECONDARY sources. You have had ample time to find such support and clearly are unable to do so. EllenCT (talk) 05:05, 13 May 2016 (UTC)

You've had plenty of time to read your own sources too, and some of them are full of secondary sources to support this article. You might have noticed that some of the references in your citations were already in this article. Furthermore, if you had bothered to thoroughly read your references and take notes you might have been able to make more accurate statements about what they say.Phmoreno (talk) 02:23, 16 May 2016 (UTC)

@Phmoreno: what secondary sources do you believe are cited in this article, other than those that I've added? Per WP:PSTS we do not depend on primary sources as reliable merely because some of them cite secondary sources. EllenCT (talk) 21:25, 16 May 2016 (UTC)

@EllenCT:Regarding secondary sources, of which there are many, you still need to be specific as to which citations you are questioning. As for primary sources, Harris (1943) for example is widely cited by secondary sources and by tertiary sources. It's important enough to be made available online from the Federal Reserve Archive can be found cited by the St. Louis Fed. Also, it is quoted, allowing no room for analysis, opinion or interpretation. It is in complete compliance with Wikipedia guidelines for primary sources. (Have you read them? Be sure you do!) That makes it a rock solid citation.Phmoreno (talk) 00:06, 17 May 2016 (UTC)

Hansen more frequently referred to “stagnation” than “secular stagnation,” though his theory became associated with the latter term, perhaps because of a famous essay by Harvard economist Alan Sweezy. In Monthly Review the terms were used interchangeably for decades, though usually, as in the stagnation theory of the 1930s–’50s, focusing on “stagnation” alone without the adjective. See: Alvin H. Hansen, Full Recovery or Stagnation(New York: W.W. Norton, 1938); Alan Sweezy, “Secular Stagnation?,” in Seymour Harris, ed.,Postwar Economic Problems(New York: McGraw Hill, 1943), 67–82; Paul M. Sweezy, “Why Stagnation?,”Monthly Review 34, no. 2 (June 1982): 1–10; John Bellamy Foster, “Is Monopoly Capitalism An Illusion?,”Monthly Review 31, no. 4 (September 1981): 36.Phmoreno (talk) 03:34, 17 May 2016 (UTC)

Actually Harris (1943) is a secondary source of statements related to Alvin Hansen, in Alan Sweezy's "famous" essay on secular stagnation.Phmoreno (talk) 15:33, 18 May 2016 (UTC)

Do you understand that a WP:SECONDARY reliable source is typically a literature review, not just any source commenting on another? EllenCT (talk) 11:30, 25 May 2016 (UTC)

A secondary source doesn't have to be a literature review.Volunteer Marek (talk) 14:51, 25 May 2016 (UTC)

Recovery participation rate

How should [9] be characterized in this article? EllenCT (talk) 12:30, 13 May 2016 (UTC)

Internationally

1. Globalization has lead to generally increasing growth rates internationally, although international differences in the rates of growth caused by income inequality have led to economic stagnation among the lower and middle classes in the post-World War II developed world.

The citation is not about economic stagnation and does not mention the phrase "economic stagnation". It says"stagnant incomes".

2. While improvements in technology can prevent stagnation, more frequently aggregate demand determines which industries grow and shrink.

This is an attempt to link an unrelated article on changing sizes of economic sectors to stagnation theory. Furthermore, "aggregate demand" in the cited paper refers to economic sector re-balancing, not overall aggregate demand.Phmoreno (talk) 00:44, 16 May 2016 (UTC)

1. Every transaction counted in GDP is some entity's income. If you remove aggregated individual incomes and rely on GDP alone, then you might as well set up two computers owned by different shell corporations to trade a trillion dollars back and forth every day while the humans starve and die out. The finance sector is well known for trading derivatives such as futures contracts and options with nominal transaction values often far above the value of the real economy goods and services underlying the derivatives. Therefore, stagnation is best characterized by aggregate incomes across a population.[10][11][12][13][14]

2. @Phmoreno: When the real economy shrinks because of declining aggregate demand for goods and services of those sectors but the finance sector expands, is that stagnation in your view or not? Why or why not? EllenCT (talk) 21:21, 16 May 2016 (UTC)

If you can find a reference that explicitly relates your view of aggregate demand and the financial sector to economic stagnation then use it. However, if you combine ideas or statements from various papers to support the idea that's syntheses / original research. I read a few papers that do make claims about lack of aggregate demand hurting growth, but the same papers rank the magnitude of widening income inequality behind other factors like productivity and population growth. One also has to be careful about measuring income, that is, to look at income after taxes, adjust for benefits like the increased cost of health care insurance and for government transfer payments.Phmoreno (talk) 00:17, 17 May 2016 (UTC)

Information related to your POV is mentioned in the Stagnation and the financial explosion: The 1980s section.Phmoreno (talk) 13:31, 19 May 2016 (UTC)

Bork (1999) and several of the papers look at it more from the point of declining productivity growth as the sector sizes change. Gordon discusses the decline in productivity growth in more detail. I have a financial newsletter that shows the contributions to economic growth in a bar chart and it's striking to see the effect of declining productivity growth and declining population growth on the U.S. economy. The change in income distribution is a drag that Gordon mentions but doesn't estimate, but I've never seen very high estimates for the negative impact of widening income inequality on economic growth because you can't actually create sustainable growth simply by leveling incomes; you have to have productivity growth.Phmoreno (talk) 23:59, 16 May 2016 (UTC)

De-emphasize United States except for Great Depression and recent period

Making space for expansion of Japanese stagnation section. Much of the United States information is now available at Economic history of the United States.Phmoreno (talk) 20:54, 16 May 2016 (UTC)

@Phmoreno: did you notice the first of the two sources on Japan you added describes, in its abstract, "the chronic lack of domestic demand since the mid-1970s caused by the long-run decline in capital formation [and slow] growth due to Japan’s low information and communications technology investment"? And the other one says, "the Japanese case is unusual is [sic] that financial problems (that we describe in detail below) seem disproportionately large relative to the macro stagnation." EllenCT (talk) 21:31, 16 May 2016 (UTC)

I certainly did notice that in one of the articles. According to the articles it's because the Japanese were saving 25% of their income. Furthermore it's because of the life cycle spending. The aging population of Japan (or other societies for that matter) reduce their spending as they get older. The purpose of the needs expansion tag is to elaborate on those and other factors, such as the decline in productivity growth.Phmoreno (talk) 23:46, 16 May 2016 (UTC)

The article describing Japan's financial conditions is dated 2004. The same conditions exist today in the U.S., parts of the EU (Greece, Spain....) and still do following the 2008 financial crisis, but I don't know how much it is discussed in the stagnation literature. It doesn't seem to fit in the original stagnation theory.Phmoreno (talk) 00:56, 17 May 2016 (UTC)

conflating two theories

It looks like two different theories are being conflated. They're both posited as explanations for stagnation but they are not both "secular stagnation"

One, you've got the Summers/Krugman etc. theory that because of demographic changes, real interest rates are low, monetary policy is ineffective and the "normal" condition of aggregate demand is for it to fall short of potential output.

Two, you've got the Gordon (also Paul Romer says this) theory that as far as technological progress goes, all the low hanging fruit has been picked so we'll have a lower rate of technological progress.

These two theories ought to be separated out.Volunteer Marek (talk) 03:58, 25 May 2016 (UTC)

As one of the articles stated, "stagnation means different things to different people". The term "secular", meaning long term, was added by Alan Sweezy and was not used by Alvin Hansen. (Japan's stagnation is often described as "secular" and unfortunately discussion of Japanese stagnation seems to be left out of the U.S. and European centered debate.) As for separating the current debate into one group who sees demographic changes and insufficient aggregate demand the other focused on the productivity slowdown, they are both part of the explanation of today's slow growth. The other way of looking at stagnation is by separating the great depression era stagnation from today's. A problem with either method of separation is the amount of overlap of contributing factors. A well rounded article should do its best to point out both differences and similarities between time periods and between current views and to integrate the Japanese stagnation story.Phmoreno (talk) 17:47, 25 May 2016 (UTC)

New Secular stagnation theory article

I object to this revert because it deletes the section on the general international perspective, which takes a per-capita instead of a per-country approach. EllenCT (talk) 15:24, 26 May 2016 (UTC)

Neither of the references in the Internationally section discusses "economic stagnation". This is an attempt at synthesis and moving that section to follow the lede is POV pushing.Phmoreno (talk) 15:32, 26 May 2016 (UTC)

Secular stagnation should stay in this article, as it is a possible cause of economic stagnation. That said, this article needs reorganizing, and some expansion to include the low-income stagnation experienced by some developing countries, the the stagnation experience by the communist countries before the breakup of the USSR. LK (talk) 02:50, 4 June 2016 (UTC)

separate article re secular stagnation

I'm a wiki rookie, so please forgive any inadvertent gaffes.

I favor a separate topic on the evidence for and against secular stagnation and the differing theories that seek to explain why economic growth may be markedly less than in the past. It is certainly true that secular stagnation might be discussed under Economic Stagnation in general, but there are many causes of such stagnation that are decidedly not "secular." They may be the result of ineptitude, corruption, events occurring in other economies, or discrete trends. For example, a country largely dependent on oil export revenues will be greatly affected when the global oil price declines. Users of Wikipedia with an interest in understanding and evaluating secular stagnation may not be interested in reading about stagnations of the past that have clear idiosyncratic explanations.

An article on secular stagnation theory should provide a careful and fairly comprehensive development of the recent historical antecedents (beginning with the stagflation of the late 1970s and including Japan's multi-decade struggle, the Asian contagion, the twin bubbles of the stock market in the '90s and real estate in the '00s, and the travails of the US and Europe in the ’10s) that gave rise to current interest in the theory. It should then provide an explication with citations of theories that seek to explain these events. I think I have identified four theories that are in play. 1, the earliest, is the Malthusian critical resource argument, widely popularized in the 70s by The Limits to Growth. Support has waned for this argument to some extent, but it's still around. 2, the neo-Keynesian argument that it has become more difficult to generate adequate aggregate demand to produce growth (Krugman and part of Summers). 3, diminishing returns from technological progress (Gordon, Romer, Paepke, and Cowen and maybe part of Summers). 4, an emerging environmental limitations or exploitation of externalities argument. Several writers involved in the climate change discussion have argued that rapid economic growth in the industrial era has been fostered by an ability to dump the waste products of that growth into air and water, and that the global warming threat means we must resize our economic aspirations to the atmosphere's carrying ability. China's decade of being the largest driver of economic growth while creating dangerously polluted air and water and becoming the largest emitter of CO2 is another data point. Contra Marek, I'm not sure why any one of these has a monopoly on the secular stagnation tag.

Because this is a topic of special interest to me, and I think it has important practical consequences, I am considering writing an article as sketched out above. This would take several months to do properly, as I would need to review older sources and acquaint myself with newer ones. Reading this talk page, I'm concerned that this topic is degenerating into some very agenda-driven arguments, which have no interest for me. Although I have opinions about the strength of the different theories, and even the concept itself, an encyclopedia is no place to indulge those opinions.

I would appreciate it if anyone could offer any recommendations on whether to proceed with such an effort and how to navigate the cross-currents evident on this page. 24.249.186.213 (talk) 21:52, 4 June 2016 (UTC) Owen Paepke, author, The Evolution of Progress (1993)