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Secular Stagnation: A Long-Run Phenomenon, Short-Run Policies. The Case of the U.S. Economy Cover

Secular Stagnation: A Long-Run Phenomenon, Short-Run Policies. The Case of the U.S. Economy

By: Val Vlad and  Cristina Elena Popa  
Open Access
|Jan 2026

Abstract

This study examines the persistent slowdown of the U.S. economy since 2007 and argues that it represents a secular stagnation: a structural form of slowdown growth, rather than a cyclical weakness. Despite unprecedented monetary expansion and near-zero interest rates from 2008 to 2022, economic growth failed to return to norms, revealing the limits of conventional policy tools. Using annual growth data from 1949 to 2025, the study employs ANOVA-type models and binary-variable segmentation to identify structural breaks in growth behavior. We distinguish six homogeneous business-cycle intervals and three long-run growth phases, with long-term growth averages of 4%, 3%, and 2%, respectively. One important conclusion is that the decline of growth potential has been a long-run process undeterred by the excessive use of monetary and fiscal tools. This resonates with the Tinbergen Rule that discourages the use of short-run policies to treat long-run economic problems. We refined the concept of secular stagnation and defined it as a long-run structural phenomenon driven by recent socio-economic conditions including slower productivity growth, chronic investment shortfalls, diminishing returns from digital technology, etc. The ongoing stagnation is unlikely to reverse without significant policy reorientation; it needs renewed scholarly and policy attention and requires long-term structural solutions.

DOI: https://doi.org/10.2478/sbe-2025-0058 | Journal eISSN: 2344-5416 | Journal ISSN: 1842-4120
Language: English
Page range: 345 - 365
Published on: Jan 18, 2026
In partnership with: Paradigm Publishing Services
Publication frequency: 3 issues per year

© 2026 Val Vlad, Cristina Elena Popa, published by Lucian Blaga University of Sibiu
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.