Secular Stagnation Reconsidered

The paper focuses on the resurfacing of the question of stagnation in the debate on the crisis. It examines the rejuvenation of the “secular stagnation” hypothesis that had fallen largely out of sight. Its history helps to frame the question of stagnation tendencies today. The paper argues that we need to look at the peculiar pattern of transformation dictated by the ongoing development of ICTs within the larger question of the reasons underpinning the structural lack of aggregate demand. The Internet has “developed” the market of higher order needs such as access and interactivity in a unique way. But ICTs have become the enabling tool for a restructuring of many of the industries serving these needs. Precisely this pervasive transformation is an important factor in the possible renewal of stagnation tendencies. Higher order needs are no longer developed into large markets in the way needs were “industrialized” in the “golden age” of advanced industrial economies. If one considers social distancing and smart work, it appears that the role ICTs is likely to be pushed forward by the Covid-19 pandemics.