In a far reaching address on the global economy at Glover Cottages on Tuesday, June 14th, Craig Emerson wondered whether the slow, sluggish performance of the global economy since the Global Financial Crisis presaged a long period of flat  economic growth or, indeed, meant that the rapid economic growth since the Industrial Revolution was now at an end.

Craig explored how we had reached this situation and argued that we were facing a deep problem that had for some time been masked by growth in China. Referring to previous thinkers, such as Alvin Hansen, and to more recent thinkers, such as Larry Summers, Emerson postulated that we had perhaps reached a phase of “secular stagnation”. Hansen’s book of 1938, Full Recovery or Stagnation based in Keynes’s General Theory has the thesis of stagnant growth and employment if there is no economic state intervention to stimulate demand. Emerson did not explore this part of Hansen’s thesis though he did state that one of the most important ways to help the economy and society was for the state to invest heavily in education.

Emerson then listed a series of “headwinds” that now face the economies of not just the developed world but also many of the other economies. These include an aging population, a flattening of educational attainment, reaching the limits of female participation in the workforce, widening inequality and accumulating debt. He added that the “second machine age” might increase productivity but would exacerbate inequality by reducing options for work.

It was a stimulating and thought-provoking evening and for a self-confessed optimist the prognosis for economic growth was rather gloomy.

Report by Brian Everingham