Ryan Avent — The global secular savings stagnation glut

What this discussion should make clear is that secular stagnation isn't much of a puzzle. Rather, it is a dilemma. The ageing societies of the rich world want rapid income growth and low inflation and a decent return on safe investments and limited redistribution and low levels of immigration. Well you can't have all of that. And what they have decided is that what they're prepared to sacrifice is the rapid income growth. In aggregate that decision looks somewhat reasonable if not entirely right. But it is a choice with pretty significant distributional consequences. And the second era of secular stagnation will come to an end when political and demographic shifts allow the losers from this arrangement to say: enough.

The Economist
The global secular savings stagnation glut
Ryan Avent
ht Tyler Cowen

See also Brad DeLong, The Current State of the Secular Stagnation-Savings Glut Debate

They haven't figured out that the problem is stagnant wages coupled with desire/ability to borrow to finance consumption is the issue and that interest rates are not the solution to this problem. The previous model of financing consumption on the back of household debt is over unless wages rise significantly, or government provides the funding, which is out of favor politically. So in the end this "secular stagnation" is really brain stagnation at the top.