Eckhard Hein criticises the mainstream's view of secular stagnation as the result of a negative real equilibrium interest rate. Arguing in a Keynesian spirit with particular reference to Steindl, secular stagnation is considered to be a result of shift in the functional income distribution, and oligopolistic organisation of industries, leading to excess capacity and reluctance to invest. This acts as a drag on effective demand and results in secular stagnation. Distributional policies and public investment can, however, overcome stagnation its tendencies.

Marx’s theory of the falling rate of profit is not only empirically borne out, but the theory he proposed seems to describe accurately how that happens. Furthermore, the whole process is useful for understanding the history of contemporary capitalism.

The author discusses the various dimensions of the recent hike in inflation in the context of the United States and policy dilemmas around high inflation GDP decline and unemployment Servaas Storm Institute for New Economic Thinking