Economy
Secular Stagnation
Definition
The hypothesis that advanced economies face a prolonged period of below-normal growth due to aging populations, declining investment needs, and excess savings.
Explanation
Proposed by Larry Summers in 2013 to explain why interest rates stayed near zero despite recovery. Aging demographics reduce labor force growth and investment demand. Technology may not generate enough investment opportunities to absorb global savings. Japan's "lost decades" may be a preview for other aging economies.