Secular stagnation, loanable funds and demography: why the zero lower bound is not the problem

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The prolific writings of Marc Lavoie and Mario Seccareccia include outstanding contributions to Keynesian macroeconomics, macro modelling, the analysis of fiscal and monetary policymaking, theories of (endogenous) money and credit, and political economy in general. One thread that runs through their papers and books over their long and distinguished careers is a critical examination of conventional neoclassical or ‘New Consensus’ economics, often with a particular focus on its approach to money and interest rates. This chapter takes up this thread and focuses on the revival of the Wicksellian loanable funds model in the (policy) discussions on the secular stagnation of the advanced economies, in particular of the US. Mario Seccareccia and Marc Lavoie have consistently argued against the relevance of this model for a monetary production economy, and this chapter, which acknowledges the cogency, clarity and power of their analyses, puts forward the main criticisms of the loanable funds argument in six points.
Original languageEnglish
Title of host publicationEconomic Growth and Macroeconomic Stabilization Policies in Post-Keynesian Economics
Subtitle of host publicationNew Directions in Post-Keynesian Economics
PublisherEdward Elgar Publishing
Number of pages17
ISBN (Electronic)9781786439574
ISBN (Print)9781786439567
Publication statusPublished - 2020


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