Secular Stagnation In Open Economies Implies Greater Global Coordination Of Fiscal and Monetary Policies

Global interest rates are likely to remain low during a period of secular stagnation.  Monetary policy at the zero lower bound is losing power and the push for austerity in many countries constrains expansionary fiscal policy.  This article describes the international pathways that reinforce secular stagnation and it makes a case for more international cooperation in capital movements and in the use of monetary and fiscal policies.  We have a global economy without the integration of national policies that are required to fight stagnation.