The Regional Expressions of Secular Stagnation

Abstract

This The terminology secular stagnation is suggested by Larry Summers in the last decade to demonstrate the globally economic downward trend. Although this standpoint was not paid importance at that time, the unstoppable decrease in world economy of recent years has shown this. Driven by these miscellaneous data, this report aims to search for evidence that can argue the secular stagnation. Thereby, we first analyse and select the objective tabular data from 1970s to 2010s covering all countries to apply the multiple linear regression model. Then the statistical theory is used for both preliminary measurement and subsequent regression diagnostics, also for the estimation method. In data processing, this paper explores the relationship between economic slow-down rate and (the logarithm of) affluence level with the random forest logarithm to find the threshold. Through the data visualization, the economic trend during the corresponding objective period can be observed intuitively. Finally, in the extension of the slow-down rate, we try to excavate the deep interactive terms among all countries. By the Solow growth model, it can be concluded that the gap between developing countries and developed countries is narrower due to the low original capital of poor countries. This phenomenon is also known as the catch-up effect. This report conducts the slow-down rate to verify the secular stagnation and meanwhile provides evidence for the relationship between slow-down and affluence levels.