The New Normal: Demand, Secular Stagnation, and the Vanishing Middle Class

The U.S. economy is widely diagnosed with two “diseases”: a secular stagnation of potential U.S. growth and rising income and job polarization. The two diseases have a common root in the demand shortfall, originating from the “unbalanced” growth between technologically “dynamic” and “stagnant” sectors. To understand how the short-run demand...