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About this book
Thomas Malthus identified a crucial tension at the heart of a market economy: While an accumulation of wealth is necessary to provide the capital investment needed to generate growth, too much accumulation will cause planned saving to exceed profitable investment, which will result in secular stagnation, a condition of low growth and underemployment of resources. Keynes drew inspiration from Malthus in his attempt to comprehend the causes of the Great Depression of the 1930s. Now, Aronoff demonstrates how a related but slightly different aspect of Malthus' thought can illuminate one of the most pressing issues of our times.
In A Theory of Accumulation and Secular Stagnation, Aronoff explores Malthus' ideas relating to secular stagnation and uses the insight gained to understand the origins of the subpar growth and tepid employment, periodically punctuated by booms, that has plagued the US economy since the turn of the millennium. He explains how the rise of mercantilism among Asian countries – principally China – and increased income concentration generated an upsurge in excess saving. This accumulation created a chronic deficiency in demand while also depressing interest rates, which generated a search for yield that fuelled periodic booms.
In A Theory of Accumulation and Secular Stagnation, Aronoff explores Malthus' ideas relating to secular stagnation and uses the insight gained to understand the origins of the subpar growth and tepid employment, periodically punctuated by booms, that has plagued the US economy since the turn of the millennium. He explains how the rise of mercantilism among Asian countries – principally China – and increased income concentration generated an upsurge in excess saving. This accumulation created a chronic deficiency in demand while also depressing interest rates, which generated a search for yield that fuelled periodic booms.
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Keywords
- financial crisis
- US financial crisis
- housing boom
- US housing boom
- debt deflation
- secular stagnation
- accumulation
- economic cycles
- volatility
- current account deficit
- capital flow bonanza
- mercantilism
- China US trade
- US China trade
- income concentration
- China savings
- leverage
- credit boom
- unemployment
- Malthus
- crisis
- Deflation
- economics
- employment
- growth
- inequality
- interest rates
- John Maynard Keynes
- Keynes
- macroeconomics
- production
- Stagnation
- trade
Table of contents (6 chapters)
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Front Matter
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Introduction
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The Malthus-Ricardo Debate
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Front Matter
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Accumulation and Secular Stagnation in the Contemporary United States
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Front Matter
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Back Matter
Reviews
“In A Theory of Accumulation and Secular Stagnation … Daniel Aronoff intelligently looks back to the works of early 19th-century ‘classical growth’ economist Thomas Malthus. … Aronoff does a laudable job of showing how Malthus’s theories might apply to the current economic environment. … as investors continue to evaluate potential implications for zero and negative interest rates, weak capital spending, and deflationary pressure, they will find it useful to include Malthus’s theory of accumulation as part of their mental models.” (Todd Wenning, CFA Institute, cfapubs.org, Vol. 11 (1), 2016)
Authors and Affiliations
About the author
Daniel Aronoff is President of Landon Companies, USA. He has served as Vice Chairman of the Board of Trustees of Grand Valley State University, USA. Throughout several decades of participation in the professional world, Aronoff has been a frequent contributor to many media outlets including the Financial Times.
Bibliographic Information
Book Title: A Theory of Accumulation and Secular Stagnation
Authors: Daniel Aronoff
DOI: https://doi.org/10.1057/9781137562210
Publisher: Palgrave Pivot New York
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s) 2016
Hardcover ISBN: 978-1-137-56220-3Published: 09 December 2015
eBook ISBN: 978-1-137-56221-0Published: 08 January 2018
Edition Number: 1
Number of Pages: VIII, 136
Topics: Financial History, Finance, general, Economic Theory/Quantitative Economics/Mathematical Methods, Economic Policy, Economic History, Macroeconomics/Monetary Economics//Financial Economics