U.S. News: Economists Split On Growth Recipe
One of the most buzzed about figures at the annual meetings of the American Economic Association in Philadelphia this weekend was Alvin Hansen, an economist who has been dead for nearly 40 years.</br></br>Mr. Hansen posited in December 1938 that the U.S. was stuck in a period of profoundly slow economic growth he called secular stagnation, driven by slowing population growth and insufficient technological progress. He turned out to be wrong, but top U.S. economists are now hotly debating whether his ideas apply today, and if so what to do about it.</br></br>The self-appointed heir to Mr. Hansen's theory is Lawrence Summers, the former top economic adviser to President Barack Obama, who points to nagging sluggish U.S. growth since the bursting of the tech bubble in 2000 and proposes more aggressive government spending.</br></br>Mr. Summers first raised the secular stagnation idea in November and pressed his argument during three days of meetings this past weekend.</br></br>"Expansionary fiscal policy is the right primary response to our current woes, one that offers more potential than is generally imagined," Mr. Summers said on a panel at the conference Saturday.