A Theory of Accumulation and Secular Stagnation

1. Front Matter

   Pages i-vii

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2. Introduction

   1. Introduction

      • Daniel Aronoff

      Pages 1-8

3. The Malthus-Ricardo Debate

   1. Front Matter

      Pages 9-9

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   2. The Malthus-Ricardo Debate on General Glut and Secular Stagnation

      • Daniel Aronoff

      Pages 10-43

   3. Say’s Principle and the Possibility of Deficient Demand

      • Daniel Aronoff

      Pages 44-65

4. Accumulation and Secular Stagnation in the Contemporary United States

   1. Front Matter

      Pages 66-66

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   2. The Theory of Accumulation and Secular Stagnation

      • Daniel Aronoff

      Pages 67-87

   3. Accumulation and Secular Stagnation in the United States after the Turn of the Millennium

      • Daniel Aronoff

      Pages 88-123

   4. Some Concluding Thoughts

      • Daniel Aronoff

      Pages 124-127

5. Back Matter

   Pages 128-136

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Thomas Malthus identified a crucial tension at the heart of a market economy: While an accumulation of wealth is necessary to provide the capital investment needed to generate growth, too much accumulation will cause planned saving to exceed profitable investment, which will result in secular stagnation, a condition of low growth and underemployment of resources. Keynes drew inspiration from Malthus in his attempt to comprehend the causes of the Great Depression of the 1930s. Now, Aronoff demonstrates how a related but slightly different aspect of Malthus' thought can illuminate one of the most pressing issues of our times.

In A Theory of Accumulation and Secular Stagnation, Aronoff explores Malthus' ideas relating to secular stagnation and uses the insight gained to understand the origins of the subpar growth and tepid employment, periodically punctuated by booms, that has plagued the US economy since the turn of the millennium. He explains how the rise of mercantilism among Asian countries – principally China – and increased income concentration generated an upsurge in excess saving. This accumulation created a chronic deficiency in demand while also depressing interest rates, which generated a search for yield that fuelled periodic booms.

• financial crisis
• US financial crisis
• housing boom
• US housing boom
• debt deflation
• secular stagnation
• accumulation
• economic cycles
• volatility
• current account deficit
• capital flow bonanza
• mercantilism
• China US trade
• US China trade
• income concentration
• China savings
• leverage
• credit boom
• unemployment
• Malthus
• crisis
• Deflation
• economics
• employment
• growth
• inequality
• interest rates
• John Maynard Keynes
• Keynes
• macroeconomics
• production
• Stagnation
• trade

“In A Theory of Accumulation and Secular Stagnation … Daniel Aronoff intelligently looks back to the works of early 19th-century ‘classical growth’ economist Thomas Malthus. … Aronoff does a laudable job of showing how Malthus’s theories might apply to the current economic environment. … as investors continue to evaluate potential implications for zero and negative interest rates, weak capital spending, and deflationary pressure, they will find it useful to include Malthus’s theory of accumulation as part of their mental models.” (Todd Wenning, CFA Institute, cfapubs.org, Vol. 11 (1), 2016)

• Landon Companies, USA

  Daniel Aronoff

Daniel Aronoff is President of Landon Companies, USA. He has served as Vice Chairman of the Board of Trustees of Grand Valley State University, USA. Throughout several decades of participation in the professional world, Aronoff has been a frequent contributor to many media outlets including the Financial Times.

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