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Secular Stagnation: A Supply-Side View


  • Robert J. Gordon


Secular stagnation on the supply side takes the form of a slow 1.6 percent annual growth rate of US potential real GDP, roughly half the 3.1 percent annual growth rate of actual real GDP realized from 1972 to 2004. This slowdown stems from a sharp decline in the growth rate of aggregate hours of work and of output per hour. This paper attributes the productivity growth decline to diminishing returns in the digital revolution that had its peak effect business hardware, software, and best practices in the late 1990s but has resulted in little change in those methods over the past decade.

Suggested Citation

  • Robert J. Gordon, 2015. "Secular Stagnation: A Supply-Side View," American Economic Review, American Economic Association, vol. 105(5), pages 54-59, May.
  • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:54-59
    Note: DOI: 10.1257/aer.p20151102

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    References listed on IDEAS

    1. Stephanie Aaronson & Tomaz Cajner & Bruce Fallick & Felix Galbis-Reig & Christopher Smith & William Wascher, 2014. "Labor Force Participation: Recent Developments and Future Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 197-275.
    2. John W. Kendrick, 1961. "Productivity Trends in the United States," NBER Books, National Bureau of Economic Research, Inc, number kend61-1, June.
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    Cited by:

    1. repec:eee:ecolec:v:147:y:2018:i:c:p:123-133 is not listed on IDEAS
    2. Alexius, Annika, 2017. "Why are real interest rates so low? Evidence from a structural VAR with sign restrictions," Research Papers in Economics 2017:6, Stockholm University, Department of Economics.
    3. Lee E. Ohanian, 2016. "The Great Recession in the Shadow of the Great Depression: A Review Essay on “Hall of Mirrors: The Great Depression, The Great Recession and the Uses and Misuses Of History”," NBER Working Papers 22239, National Bureau of Economic Research, Inc.
    4. repec:zbw:espost:173967 is not listed on IDEAS
    5. Guido Baldi & Patrick Harms, 2015. "Produktivitätswachstum, Investitionen und säkulare Stagnation," DIW Roundup: Politik im Fokus 83, DIW Berlin, German Institute for Economic Research.
    6. Philippe Andrade & Jordi Galí & Hervé Le Bihan & Julien Matheron, 2017. "The optimal inflation target and the natural rate of interest," Economics Working Papers 1591, Department of Economics and Business, Universitat Pompeu Fabra.
    7. Salvatore, Dominick, 2016. "Slow recovery and growth prospects for the United States," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 624-631.
    8. Gründler, Klaus, 2015. "The vanishing effect of finance on growth," Discussion Paper Series 133, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    9. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, Elsevier.
    10. Guido Baldi & Patrick Harms, 2015. "Productivity Growth, Investment, and Secular Stagnation," DIW Roundup: Politik im Fokus 83, DIW Berlin, German Institute for Economic Research.
    11. repec:pal:imfecr:v:66:y:2018:i:2:d:10.1057_s41308-018-0056-6 is not listed on IDEAS
    12. International Monetary Fund, 2016. "Germany; 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany," IMF Staff Country Reports 16/202, International Monetary Fund.
    13. Botta, Alberto & Tippet, Ben & Onaran, Özlem, 2018. "Divergence between the core and the periphery and secular stagnation in the Eurozone," Greenwich Papers in Political Economy 20405, University of Greenwich, Greenwich Political Economy Research Centre.
    14. William D. Nordhaus, 2015. "Are We Approaching an Economic Singularity? Information Technology and the Future of Economic Growth," NBER Working Papers 21547, National Bureau of Economic Research, Inc.
    15. Sutirtha Roy & Martin Kessler & Arvind Subramanian, 2016. "Glimpsing the End of Economic History? Unconditional Convergence and the Missing Middle Income Trap," Working Papers id:11404, eSocialSciences.
    16. Arntz, Melanie & Gregory, Terry & Zierahn, Ulrich, 2016. "ELS issues in robotics and steps to consider them. Part 1: Robotics and employment. Consequences of robotics and technological change for the structure and level of employment," ZEW Expertises, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, number 146501.
    17. Gilbert Cette & Rémy Lecat & Carole Ly-Marin, 2017. "Long-term growth and productivity projections in advanced countries," OECD Journal: Economic Studies, OECD Publishing, vol. 2016(1), pages 71-90.
    18. Atanas Hristov, 2016. "Measuring the Natural Rate of Interest in the Eurozone: A DSGE Perspective," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(1), pages 86-91, April.
    19. Lichtblau, Karl & Bähr, Cornelius & Millack, Agnes & van Baal, Sebastian & aus dem Moore, Nils & Korfhage, Thorben, 2015. "Zukunft von Wirtschaft und Gesellschaft unter Minimalwachstumsbedingungen: Begründungsmuster, Folgen, Handlungsoptionen," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 123324.
    20. Matthes, Jürgen, 2016. "Liberale Wirtschaftspolitik im Zeichen der Debatte über säkulare Stagnation und Pikettys Kapitalismuskritik," IW policy papers 1/2016, Institut der deutschen Wirtschaft Köln (IW) / Cologne Institute for Economic Research.
    21. Pietro Cova & Patrizio Pagano & Alessandro Notarpietro & Massimiliano Pisani, 2017. "Secular stagnation, R&D, public investment and monetary policy: a global-model perspective," Temi di discussione (Economic working papers) 1156, Bank of Italy, Economic Research and International Relations Area.
    22. repec:cbk:journl:v:7:y:2018:i:1:p:59-100 is not listed on IDEAS
    23. repec:sos:sosjrn:180105 is not listed on IDEAS
    24. Daniele, Vittorio, 2015. "Una stagnazione secolare? Italia, Giappone, Stati Uniti, 1950-2015
      [Towards a secular stagnation? Italy, Japan, United States, 1950-2015]
      ," MPRA Paper 69997, University Library of Munich, Germany.
    25. repec:eee:respol:v:47:y:2018:i:2:p:379-389 is not listed on IDEAS

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence


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