Larry Summers: We need bubbles

Has losing out to Janet Yellen in the race to be the next head of the US Federal Reserve turned Larry Summers into a pessimist, or simply freed him to speak his mind even more than he usually does?

The notoriously blunt former Treasury secretary raised eyebrows when he told an IMF conference earlier this month that the US economy may be undergoing a “secular stagnation” similar to Japan’s experience over the past two decades.

Given Summers has previously made statements such as “We remain totally unlike Japan”, this indicated that he has undergone a major shift in his views [...]

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