Publications: The Petroleum Economics Monthly

Oil and Secular Stagnation (November 2015)


This issue of The Petroleum Economics Monthly examines "secular stagnation." Secular stagnation has interested Professor Lawrence Summers, the former US Secretary of the Treasury and president of Harvard, for the past two years. In writing about this issue, he has revived a discussion originally broached by Harvard professor Alvin Hansen in the 1930s. Hansen described periods of secular stagnation as "'sick' recoveries that die in their infancy and depressions which feed on themselves and leave a hard and seemingly immoveable core of unemployment." Today, Summers and other economists worry that the global economy is again experiencing secular stagnation. The implications are terrible for energy producers that have invested expecting continually rising prices based on their anticipation of ongoing economic growth. In contrast, global secular stagnation could result in years of very low or negative interest rates, sluggish increases or even decreases in fossil fuel consumption, and very low oil and gas prices.


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