Secular stagnation and decline: a simplified model

Krouglov, Alexei (2014): Secular stagnation and decline: a simplified model.

Abstract

Presented is a mathematical model of single-product economy describing a nominal economic growth and a nominal economic decline. Based on the model of economic dynamics, policies handling the gravity of the secular stagnation are furnished. First, transition of the secular stagnation into the secular decline is to be prevented. Second, a two-stage economic policy against the secular stagnation should be entertained. The first stage is to promote a policy of advancing the additional demand for products to counterbalance the additional supply of products by external suppliers. The second stage is to sustain a policy of savings and investments to stipulate an economic growth where the savings and investments are to be committed with a modest acceleration. Two stages of the alleviating economic policy can be executed concurrently.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic growth; business fluctuations; secular stagnation
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development

References

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Krouglov, Alexei, 2009, “Mathematical Dynamics of Economic Growth as Effect of Internal Savings,” Finance India, Vol. 23, No. 1, pp. 99-136.

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