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Economic stagnation in the United States: underlying causes and global consequences

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  • Robert A. Blecker

Abstract

This paper analyzes the causes of the slow recovery of the U.S. economy since the financial crisis and Great Recession of 2008-2009. Fallen house values and excessive household debts continue to depress consumer spending, while corporations are failing to invest in spite of record profits. The increasingly unequal distribution of income limits demand, while long-term structural transformations continue to erode employment creation. An expansionary monetary policy has been incapable of sparking a more robust recovery and fiscal policy has been shifted to an austerity stance. In this context, Brazil and other emerging market nations cannot count on the United States to continue to be the leading source of global demand as it was in previous decades. JEL Classifications: E60; F32; N12; E12.

Suggested Citation

  • Robert A. Blecker, 2014. "Economic stagnation in the United States: underlying causes and global consequences," Brazilian Journal of Political Economy, Center of Political Economy, vol. 34(4), pages 689-725.
    • Handle: RePEc:ekm:repojs:v:34:y:2014:i:4:p:689-725:id:297
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    More about this item

    Keywords

    U.S. economy; economic stagnation; austerity policies; global imbalances; inequality;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory

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