Policy Insight 86: Secular stagnation, bubbles, fiscal policy, and the introduction of the pill
Essential reading, for all those with an interest in the broader policy implications of key Economic issues, CEPR's Policy Insight series has been growing steadily since its inception in 2007; today we are please to announce the publication of number 86:
Secular stagnation, bubbles, fiscal policy, and the introduction of the pill by Jason Lu and Coen Teulings
The decline in real interest rates over the past several decades has been the subject of intense policy debate. This column argues that, with the current demographic profile of large older cohorts leading to a population that is disproportionately biased towards saving, we can expect real interest rates to remain low or negative for another 10 to 15 years. The only way for the Eurozone, in particular, to accommodate these excess savings may be to raise its sovereign debt levels.
CEPR Research Fellow Coen Teulings and his co-author Jason Lu introduce their Policy Insight in a VoxEU Column, also published today.
The full list of Policy Insights, all freely available for download, can be found here.