secular stagnation

Extracted from a paper delivered to Wellington South Rotary; 22 March

1. The US is No Longer The International Hegemon

Are we entering a long period of secular stagnation in which interest rates are low? We cannot foresee all the implications. 

This has not been an easy column to write, and it may not be an easy one to read. Part of the problem is that there is no agreement within the economics profession as how to interpret what is going on.

The more one is certain about the state of an economy, the more one is likely to be wrong; the more one is certain about the state of an economy, the greater the media coverage. No wonder the public is confused.

I shan’t add to the confusion. In quick summary, the New Zealand’s economic growth seems to be slowing down but we don’t know whether it will go negative and economic activity contract.

* The Australian economy  is in the doldrums.