You probably already read this.
Secular stagnation works through reduced domestic investment and consumption, the global savings glut through weaker exports and a larger trade deficit. However, there are important differences as well. As I’ve mentioned, the savings glut hypothesis takes a global perspective while the secular stagnation approach is usually applied to individual countries or regions. A second difference is that stagnationists tend to attribute weakness in capital investment to fundamental factors, like slow population growth, the low capital needs of many new industries, and the declining relative price of capital. In contrast, with a few exceptions, the savings glut hypothesis attributes the excess of desired saving over desired investment to government policy decisions, such as the concerted efforts of the Asian EMEs to reduce borrowing and build international reserves after the Asian financial crisis of the late 1990s.
I find Bernanke, both in this post and in preceding ones, more persuasive than Larry Summers.
But why do people want to save more at the same time the extent of the market should be growing?
What struck me most about Thiel that I only can verbalize now is how he systematizes for verbalization every issue. Several of his answers I had thought similarly but in a more muddled way.
In that spirit, I’ve thought of this as two PSST stories. The savings glut is because nobody knows who will be the next development investment. The stagnation argument is that nobody knows what new patterns will sprout legs. The optimistic take is that once there is a consensus either can re-commenced global growth. The pessimistic take is that the answers simply don’t exist.