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Big ideas of 2014: Secular stagnation—does monetary policy need a radical rethink?

The global economy might have been in trouble long before 2008

Former US Treasury Secretary Larry Summers

“What if the downturn is an effect of persistent economic stagnation?”: Former US Treasury Secretary Larry Summers © AP Photo/Michel Euler

Larry Summers, the former US Treasury Secretary, captured one of 2014’s big themes in two words—”secular stagnation”—in a speech to the International Monetary Fund in November. The idea isn’t new—its roots are in the 1930s—but his interjection, just as growth is picking up, provoked a storm of comment.

What if, Summers asked, it turns out that the downturn which followed the crisis…

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