Secular Stagnation Needn't Be Sore If Less Is More, BOE Suggests

  • Mind the happiness gap, says post on Bank Underground blog
  • Many desires are illusory -- because satisfaction is transient

The Bank of England’s staff blog has just offered a novel policy response to secular stagnation -- one that makes negative interest rates seem conventional by comparison.

Dan Nixon, an economist at the U.K. central bank, suggests in a post published on Monday that encouraging a “less is more” perspective based on the Buddhism-rooted concept of mindfulness might help people to reach a level of happiness that consumer-based societies struggle to achieve. Many of our economic cravings are illusory because the satisfaction they bring when fulfilled is transient, he says.

“By better understanding our desires, we may find it makes more sense to try to simplify them rather than satisfy them,” he writes on Bank Underground. “Pursuing this approach, fewer desires crystallize into consumption, yet happiness is higher.”

The post underlines how, 10 months since its creation under Mark Carney’s governorship, Bank Underground is pushing boundaries from the orthodox research traditionally offered by central banks. It also shows how the BOE itself has changed: Nixon notes that the institution is one of several employers to offer courses on mindfulness.

Less Burdened

Its idea is to teach people, often through meditation, to be more focused on the present. That way, they get less burdened by memories or worries about the future, Nixon says, noting that practicing mindfulness can combat depression and stress. Encouraging people to consider that less is more could help them cope in a world with persistently low rates of global growth, he adds.

“The debate on secular stagnation provides extra motivation for looking at new ways to achieve happiness,” he says. “If that’s the world we are in, increased attention will naturally turn to alternative ways to increase well-being; ‘less is more’ ideas could form one part of the solution.”

The BOE isn’t the only institution looking at such issues. Following similar initiatives in Bhutan and France, Prime Minister David Cameron said in 2010 that the U.K. would become one of the first countries to start recording happiness. The Office for National Statistics now publishes data combining traditional economic gauges with social, environmental and more subjective well-being indicators to show how Britons as a whole are doing.

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