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6) Secular stagnation is generally confused with technological stagnation as both would lead to slow growth in the long term. Explain how the two are interrelated? What needs to be done? Discuss.(250 words)

Topic:  Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

6) Secular stagnation is generally confused with technological stagnation as both would lead to slow growth in the long term. Explain how the two are interrelated? What needs to be done? Discuss.(250 words)

Reference

Why this question:

The term “secular stagnation” was coined by economists in the 1930s and recently become a catch description for long-term economic pessimism. However, it got confused with a very different idea- the technological stagnation hypothesis, proposed by economist Robert Gordon. Thus the question.

Key demand of the question:

Explain what you understand by secular stagnation and technological stagnation, compare and contrast the two and conclude with a fair and balanced opinion.

Directive:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

In brief define the terms Secular stagnation and technological stagnation.

Body:

Discuss the following aspects in your answer:

First discuss in detail the two terms – secular and technological stagnation; The term “secular stagnation” was coined by economists in the 1930s and recently become a catchall Description for long-term economic pessimism. The technological stagnation is about supply side i.e. lack of interest from side of producers to innovate and to produce goods which break existing technological status quo. A key piece of the tech stagnation hypothesis is that production of the things we want isn’t going to get much cheaper. It reflects slowing productivity as evidence that our economy is getting worse at finding new ways to do more with less.

Analyse the inter-relationship between the two.

Present for India’s Growth potential and secular stagnation scenario.

Conclusion:

Conclude with what is the need of the hour for the Indian economy.

CategoriesINSIGHTS