Ladies and gentlemen, Long-term forces are not the only possible cause for the modest growth performance recorded over the past few years. The recent debate has provided many more potential explanations for the weak economic recovery, and these, too, will be discussed later today and tomorrow. Of particular prominence is the secular stagnation hypothesis dating back to Harvard economist Alvin Hansen.
He viewed the weak recovery in the aftermath of the Great Depression as being caused by excess savings and a real interest rate that could not fall sufficiently such as to equate supply and demand at full employment.