A multilateral framework is needed to reverse the effects of secular stagnation and should be the primary focus of President-elect Biden’s administration, according to Larry Summers.

Summers participated in a program sponsored by the Peterson Institute for International Economics, Rebuilding the Global Economy, and wrote a paper advising Biden’s incoming Treasury Secretary. He also spoke via a webinar on November 10.

Having served in the prior two Democratic administrations, Summers will be an influential voice in the Biden presidency. He served as Secretary of the Treasury under President Clinton and as chairman of the Council of Economic Advisers under President Obama.

Summers popularized the use of the term “secular stagnation,” which refers to a period of depressed economic demand, which began in the U.S. in 2008 after the global financial crisis (GFC). It is characterized by an excess of savings, depressed investment, low inflation and low (or negative) real interest rates. Those factors combine to bid up the prices of assets, including equities, leading to bubbles and market instability.

Globalization and economic progress have been “corroding” since the GFC, Summers said, especially over the last four years. He said the incoming Treasury Secretary should focus on the international arena because it will be difficult passing domestic legislation and regulation.

Summers cited Tony Blair, who said, “The problem is that the radical are not sensible and the sensible are not radical.” Summers said the sensible need to be bold.

Summers outlined three broad priorities.

The U.S. needs to restore international cooperation and commitment during this crisis. In 2008, there were bold domestic and international policies that provided liquidity, kept trade open and drove fiscal stimulus. The response to the current crisis domestically has been bolder and larger, he said, but nothing comparable has taken place internationally.

“Reversing that must be a first priority for the new Secretary of the Treasury,” Summers said.