Great Graphic: Where is the Secular Stagnation?

This Great Graphic shows the GDP of several major economies measured in US dollars.    It was posted in the Wilson Quarterly, and draws from World Bank data.  The US economy is on a parallel but somewhat lower path than it was on through the 90s and noughts.  The US economy is creating more goods and services than ever.  

China's nominal growth has accelerated over the past decade. It reflects not just China's real growth, but incorporates inflation, which has run consistently higher in China than the other countries here, and the yuan's appreciation.  The appreciation of the yuan coincides with the acceleration of China's nominal growth in US dollar terms starting in 2005. Although it is difficult to tell it from the chart, the economy has grown 24-fold since 1989.    In the same time, the US economy has grown three-fold.

The charts covers the 1989-2010 period.  In the last couple of years, the Chinese economy has slowed.  However, in nominal terms it is still poised to double over the decade.  It may take the US economy closer to 20 years to double.  

The resurrection of the secular stagnation theory by Lawrence Summers has captured the imagination of many, and in some ways, encapsulates the present angst.   However, it is difficult to spot it in the data--not for the US, China, or even Japan.  Russia too appears to have been expanding, albeit slowly, before the confrontation over the Ukraine.   The stagnation appears most evident in Germany, France and the UK.  However, it is not clear from the data that it is secular in nature.  

Great Graphic: Where is the Secular Stagnation? Great Graphic: Where is the Secular Stagnation? Reviewed by Marc Chandler on October 20, 2014 Rating: 5
Powered by Blogger.