Delving into the Secular Stagnation Hypothesis

PEREZ ARTICA, RODRIGO; BRUFMAN, LEANDRO; MARTINEZ, LISANA BELÉN

Comparative Economic Studies

Palgrave Macmillan UK

Lugar: Nueva York; Año: 2017 vol. 59 p. 77 - 106

0888-7233

We document a persistent increase in excess savings (defined as the differencebetween gross savings and capital formation) and a steady decline of grosscapital formation in a sample of non-financial firms from developed countries.These patterns developed even before the financial breakdown of 2007 reinforcingthe case for a secular stagnation hypothesis. They go along with adeleveraging process and a decrease in the share of operating assets in totalassets. We discuss three possible explanations for this long-term behavior:financial constraints, operative volatility, and the weakening of business dynamismitself.