Showing posts from April, 2015

Discounting Climate Change Under Secular Stagnation

Ben Bernanke, recent former Chair of the Federal Reserve, has a new blog .  And he's writing about low interest rates and so-called secular stagnation, a pre-WWII phrase recently resurrected by Larry Summers . The topic is dismal--hey, they're economists! But for those in the field it's a real hoot to see these titans of economic thought relieved of their official government duties and able to write openly about what they really think. These two share many views, but Ben has a less dismal outlook than Larry.  Larry thinks we're stuck in a low-growth equilibrium, and low or even negative interest rates are here to stay without large, persistent fiscal stimulus.  Ben thinks this situation is temporary, if long lived.  He writes: I generally agree with the  recent critique of secular stagnation by Jim Hamilton, Ethan Harris, Jan Hatzius, and Kenneth West . In particular, they take issue with Larry’s claim that we have never seen full employment during the past sev