

Secular stagnation – a theory that's taking economics by storm - __Joker
http://www.vox.com/2014/10/28/7078167/secular-stagnation

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yummyfajitas
It's important to note that secular stagnation, while being a recently popular
theory, seems to require implausible assumptions. For example, the
Egertsson/Mehrotra paper is one of the first papers to actually come up with a
formal secular stagnation model.

Unfortunately in order to make it work, the model requires both negative rates
of return and high storage costs, both of which simply aren't correct. It
remains to be seen whether one can actually construct a secular stagnation
model that fits the world.

[http://marginalrevolution.com/marginalrevolution/2014/10/doe...](http://marginalrevolution.com/marginalrevolution/2014/10/does-
the-egertsson-and-mehrotra-model-of-secular-stagnation-work.html)

It's also worth noting that many of the same pop-economists who purport to
believe in secular stagnation also tend to subscribe to Piketty-style
theories. These people can be immediately dismissed as fools, since Piketty
postulates a world with high rates of return and significant investment in
productivity. Piketty is very much incompatible with secular stagnation.

