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The United States Economy: Growth, Stagnation or New Financial Crisis

Paper Session

Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)

Marriott Marquis, Marina Ballroom D
Hosted By: American Economic Association
  • Chair: Dominick Salvatore, Fordham University

Reaping What You Sow: the Changing Composition of Investment

Janice Eberly
Northwestern University


Recent research on the US economy emphasizes a slowdown in US productivity growth, as well as demographic and fiscal imbalances. Many proposed solutions to these challenges involve greater investment in productivity-enhancing technologies, infrastructure, and education, for example. Yet, investment in these areas and others has already been changing over time, reflecting rates-of-return, fiscal constraints, and demographic trends. We examine these trends in investment and its composition, and whether they ease or reinforce the challenges ahead.

Productivity Origins of “Secular Stagnation"

Valerie A. Ramey
University of California-San Diego


The sluggish growth of the US economy since 1973, interrupted only by temporary bursts of higher growth during the dot-com boom and the housing boom, has led to fears of “secular stagnation” and calls for government aggregate demand stimulus to lift the growth rate of the economy. I argue that the fundamental source of sluggish real per capita growth in the U.S. is sluggish growth of labor productivity. Government policies can propel the economy to a higher growth path only if they generate a sustained increase in labor productivity. I consider what policies might be successful.

The Next Systemic Financial Crisis

Kenneth Rogoff
Harvard University


Deep systemic financial crises tend to be infrequent events, as they leave deep lasting scars on the psyche of consumers, investors, politicians and regulators. Normally, especially given strengthened regulation and, one would not expect another systemic event for many decades. But the situation today is anything but normal. Record high global public and private debt combined with political paralysis and extraordinarily weak leadership outside central banks make today’s uncharacteristically fragile at this point in the debt supercycle.

Popular Economic Narratives Advancing the Longest U.S. Expansion 2009-2019

Robert J. Shiller
Yale University


The U.S. economic expansion that, according to the NBER dates, began in June 2009, after the world financial crisis, appears to have set a new record for length, over a decade. At the same time, the unemployment rate as of April 2019 fell to 3.6%, the lowest in almost fifty years. Stock, Bond and Housing Markets went to extreme highs. This paper describes constellations of viral economic narratives that arguably affected individual economic behavior and helped drive these phenomena. The results may help us anticipate the quality and severity of the next recession.

The Future of American Fiscal Policy

Lawrence Summers
Harvard University


The combination of secular stagnation and low interest rates along with half century record low levels of Federal revenue collections pose major challenges for American fiscal policy. Planning for a strong fiscal response to the next recession should begin now. So should planning for a significant increase in Federal revenues and a strengthening of Social Security
Dominick Salvatore
Fordham University
JEL Classifications
  • E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
  • E3 - Prices, Business Fluctuations, and Cycles