Great Stagnation

The “Great Stagnation” is a term applied to an economy that is not advancing or developing. The economist Lester C. Thurow wrote a piece titled “The Great Stagnation” for the New York (NY) Times Sunday Magazine on October 17, 1982. In 1993, Thurow told a Davos annual meeting of the World Economic Forum that ““what we have is not the Great Depression. It is the great stagnation.”
 
The term “Great Stagnation” was popularized in 2011. The economist Tyler Cowen published a book titled The Great Stagnation: How America ate all the low-hanging fruit of modern history, got sick, and will (eventually) feel better (2011). In September 2011, the financial firm of Goldman Sachs published a report, From the ‘Great Recession’ to the ‘Great Stagnation’.
 
   
Free Merriam-Webster Dictionary
stag·nant adj \ˈstag-nənt\
Definition of STAGNANT
1a : not flowing in a current or stream “stagnant water” b : stale “long disuse had made the air stagnant and foul — Bram Stoker”
2: not advancing or developing “a stagnant economy”
 
Wikipedia: Lester Thurow
Lester Carl Thurow (born 1938) is a former dean of the MIT Sloan School of Management and author of books on economic topics. Thurow was born in Livingston, Montana.
 
Google Books
Introduction to Macroeconomic Theory
By Gerald Sirkin
Homewood, IL: Irwin
1970
Pg. 182:
THE GREAT STAGNATION, 1956-64
From the end of World War II until 1956, except for the short recession periods, output was at or very close to the full- potential level. But from 1956 to 1964, output remained substantially below the ...
 
17 October 1982, New York (NY) Times, pg. SM32:
The Great Stagnation
By Lester C. Thurow
(...)
All of which adds up to this: The world economy is likely to continue sinking into the quicksands. We are likely to have more of the rising unemployment and increasing financial distress we have been experiencing for the last three and a half years. There is simply no indication that the Western nations, individually or jointly, have any program or any approach that is capable of turning the tide.
 
From the perspective of this economist (...) the solution lies in old-fashioned Keynesian stimulus. Until we are willing to practice it, America and the world are likely to remain mired in what might be called the Great Stagnation.
   
New York (NY) Times
World Trade Pact Now Seen At Least Several Months Off
By ROGER COHEN
Published: January 30, 1993
(...)
‘The Great Stagnation’
Indeed, Mr. Dunkel’s announcement came as Lester Thurow, a leading economist, declared at the Davos meeting that “what we have is not the Great Depression. It is the great stagnation.” He added that he believed President Clinton would have to stem imports to achieve the domestic economic growth of 4 percent he seeks.
   
Google News Archive
1 November 1994, Middlesboro (KY) Daily News, “Why voters are mad at Washington” by Morton Kondracke, pg. 4, col.1:
If the “anxious class” is mad at Washington, it’s partly because for years, politicians have claimed credit for inventing devices to protect the population from disasters like the Great Depression. But they haven’t protected people from the Great Stagnation.
   
Google Books
The Literate Economist: A Brief History of Economics
(The Harpercollins Series in Economics)
By E. Ray Canterbery
New York, NY: HarperCollins
1994
Pg. 334:
THE ENDING OF THE GREAT STAGNATION
We have been in what I have described as the Great Stagnation, beginning around l987.
 
Google Books
Fortune Favors the Bold:
What we must do to build a new and lasting global prosperity
By Lester C. Thurow
New York, NY: HarperCollins
2005
Pg. 76:
Everyone can learn from the Japanese mistakes. Japan provides a textbook of what not to do. Its bad economic policies led to what is called in Japan the lost decade and what might be called the Great Stagnation were we using the terminology of the 1930s.
 
OCLC WorldCat record
Japan’s great stagnation : financial and monetary policy lessons for advanced economies
Author: Michael M Hutchison; Frank Westermann
Publisher: Cambridge, Mass. : MIT Press, ©2006.
Series: CESifo seminar series. 
Edition/Format:  Book : English
Summary: Experts on the Japanese economy examine Japan’s prolonged period of economic underperformance, analyzing the ways in which the financial system, monetary policy, and international financial factors contributed to its onset and duration.
   
Google Books
Creating Wealth:
Retire in Ten Years Using Allen’s Seven Principles of Wealth
By Robert G. Allen
New York, NY: Free Press
2006
Pg. 4:
There are lessons we feel we have learned from the Great Depression of the 1930s, the Great Recession of the 1970s, the Great Stagnation of the 1980s, or the great stock-market booms and busts of the last twenty years.
   
FT.com
The crisis of middle-class America
By Edward Luce
Published: July 30 2010 17:04 | Last updated: July 30 2010 17:04
(...)
Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years.
(...)
The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle
 
OCLC WorldCat record
The great stagnation : how America ate all the low-hanging fruit of modern history, got sick, and will (eventually) feel better
Author: Tyler Cowen
Publisher: New York : Dutton, 2011.
Edition/Format:  Book : English
 
Zero Hedge 
Goldman Sachs: “Welcome To The Great Stagnation”
Submitted by Tyler Durden on 09/29/2011 10:40 -0400
(...)
The report is titled “From the ‘Great Recession’ to the ‘Great Stagnation’” and in an extended analysis looking at 150 years of historical data, it concludes that “those historical lessons suggest that the probability of stagnation in the current environment is much higher than usual, at about 40% for developed markets. Trends in Europe and the US are so far still following growth paths that would be typical of stagnations.” Looks like Goldman just proved us at least half right when we said in January that the keyword of 2011 would be “stagflation.” Luckily, the Fed and the world’s central banks still have 3 months in which to prove the second half of our prediction correct as well. 
 
Bloomberg.com
‘Great Stagnation’ Looms as Confidence Lags
By Aki Ito and Jennifer Ryan - Sep 30, 2011 3:56 AM CT
The U.S. and Europe face about a 40 percent likelihood of a prolonged period of economic stagnation should policy makers fail to restore confidence, according to analysts at Goldman Sachs Group Inc.
 
“The prospect of a long period of stagnant growth is a plausible risk and a legitimate concern for the major developed economies,” Jose Ursua, a Goldman economist in New York, wrote in a report. “Whether these countries manage to avoid a ‘Great Stagnation’ by a pick-up in the recovery is likely to depend on policy being able to restore confidence and putting in place reforms that can decisively jolt growth.”