Such discussions have been initiated by Lawrence Summers’ revisit to the “secular stagnation thesis” advocated originally by Alvin Hansen in the late 1930s. Various views have been raised regarding the causes of slow post-financial crisis recoveries; for example, the persistent weakness on the demand side of the economy and the low productivity on the supply side.
There have been wide-ranging interpretations and views on secular stagnation. In light of the discussions over slow post-financial crisis recoveries, I would like to raise three policy issues. The first issue is to what extent central banks should consider the impact on the supply side of the economy in conducting monetary policy.