ADVANCED countries have struggled to make up the ground that they lost in the “great recession” that followed the financial crisis of 2007-08. America and Germany were relatively quick to regain lost ground but Britain has only just surpassed its pre-crisis GDP peak. And despite the support from generally strong German growth since the middle of 2009, the euro zone as a whole has failed to do so owing to a double-dip recession that lasted even longer than the first one and a subsequent feeble recovery that ground to a halt in the second quarter of 2014. The overall lack of progress has occurred even though interest rates are pinned to the floor and despite the stimulus from big quantitative easing programmes in Britain and America.

This suggests that something more fundamental has gone wrong than the usual down-phase of the business cycle. That misgiving was encapsulated when Lawrence Summers, a prominent American economist, suggested last year that advanced economies might be suffering from “secular stagnation”. That term had first been coined by Alvin Hansen in 1938 to describe what he feared was the fate of the American economy following the Great Depression of the early 1930s: a check to economic progress as investment opportunities were stunted by the closing of the frontier and the collapse of immigration.

Hansen’s forebodings were proved to be quite wrong. Will a future generation look back at the musings of Summers and scratch their heads about how he could have been so gloomy? Or will they wonder at his prescience? A new e-book, which has just been published by VoxEU, adds to the debate that he sparked, featuring the views of around 20 economists, including Summers himself.

An introduction by Coen Teulings of Cambridge University and Richard Baldwin of the Graduate Institute in Geneva imposes some order on this unruly bunch of contributors. Secular stagnation, they say, describes economies that require negative real interest rates (ie, actual nominal rates that are lower than inflation) to achieve full employment. But this is hard to achieve since another feature of secular stagnation is that inflation is generally so low. That leaves central banks in a quandary given the “zero bound” to the interest rates they set (the fact that some like the ECB are imposing negative rates on funds parked by banks with them does not materially relieve this constraint). The solution adopted by the American, British and Japanese central banks has been quantitative easing—creating money to purchase financial assets—together with pledges to keep interest rates low as long as possible. But the resulting boost to financial markets and the search for yield and related appetite for risky assets may then sow the seeds of another financial crisis.

At the heart of the problem is an imbalance between sagging investment—in part because the big new internet firms like Google and Facebook require relatively little capital—and buoyant savings. Teulings and Baldwin cast some new light on this by explaining that the intensity of population ageing—from rising life expectancy and falling birth rates—has greatly increased the stock of savings required to finance longer retirements. For example in Germany, often berated for being overthrifty, they estimate that the required level has risen from almost double GDP in 1970 to over three times GDP in 2010.

The obvious solution to this imbalance is to yank up investment. Since that is tied to underlying growth (the reason for Hansen’s pessimism 75 years ago) structural reforms, which improve the supply side of the economy and raise potential growth, may be more potent than appreciated since they could also prompt higher investment, helping to fill the missing demand.

Despite the sterling efforts of the authors to pin down the term, secular stagnation remains a baggy concept, arguably too capacious for its own good. Although there are some similarities between America and Europe, it is hard to avoid the conclusion that many of the euro area’s difficulties result from a dysfunctional monetary union rather than a susceptibility to secular stagnation. It is also hard to envisage such a sterile future for the advanced countries while there remains so much growth potential in emerging economies from which they can benefit.