AS ONE year of sluggish growth spills into the next, there is growing debate about what to expect over the coming decades. Was the global financial crisis a harsh but transitory setback to advanced-country growth, or did it expose a deeper long-term malaise?

Recently, a few writers, including internet entrepreneur Peter Thiel and political activist and former world chess champion Garry Kasparov, have espoused a fairly radical interpretation of the slowdown. In a forthcoming book, they argue that the collapse of advanced-country growth is not merely a result of the financial crisis; at its root, they argue, these countries’ weakness reflects secular stagnation in technology and innovation. As such, they are unlikely to see any sustained pick-up in productivity growth without radical changes in innovation policy.

Economist Robert Gordon takes this idea even further. He argues that the period of rapid technological progress that followed the Industrial Revolution may prove to be a 250-year exception to the rule of stagnation in human history. He suggests that today’s technological innovations are insignificant compared with earlier advances, such as electricity, running water, the internal combustion engine and other breakthroughs that are now more than a century old.

I recently debated the technological stagnation thesis with Thiel and Kasparov at Oxford University, joined by encryption pioneer Mark Shuttleworth. Kasparov asked what products such as the iPhone 5 really add to our capabilities and argued that most of the science underlying modern computing was settled by the 1970s. Thiel maintained that efforts to combat the recession through loose monetary policy and hyperaggressive fiscal stimulus treat the wrong disease and are potentially very harmful.

These are interesting ideas, but the evidence still seems overwhelming that the drag on the global economy mainly reflects the aftermath of a deep systemic financial crisis, not a long-term secular innovation crisis. There are certainly those who believe that the wellsprings of science are running dry. But the vast majority of my scientist colleagues at top universities seem awfully excited about their projects in nanotechnology, neuroscience and energy, among other cutting-edge fields. They think they are changing the world at a pace as rapid as we have ever seen.

Frankly, when I think of stagnating innovation as an economist, I worry about overweening monopolies stifling ideas and how recent changes extending the validity of patents have made this problem worse.

No, the main cause of the recent recession is surely a global credit boom and its subsequent meltdown. The profound resemblance of the current malaise to the aftermath of past deep systemic financial crises around the world is not merely qualitative. The footprints of crisis are evident in indicators ranging from unemployment to housing prices to debt accumulation.

Granted, the credit boom itself may be rooted in excessive optimism surrounding the economic-growth potential implied by globalisation and new technologies. Such fugues of optimism often accompany credit run-ups, and this is hardly the first time that globalisation and technological innovation have played a central role.

Attributing the slowdown to the financial crisis does not imply the absence of long-term secular effects, some of which are rooted in the crisis itself. Credit contractions hit small businesses and start-ups the hardest. As many of the best ideas and innovations come from small companies, the credit contraction will inevitably have long-term growth costs. At the same time, unemployed and underemployed workers’ skill sets are deteriorating. Many recent college graduates are less easily able to find jobs that best enhance their skills and thereby add to their long-term productivity and earnings.

With cash-strapped governments deferring urgently needed public infrastructure projects, medium-term growth also will suffer. And other secular trends, such as ageing populations in most advanced countries, are taking a toll on growth prospects as well. Even absent the crisis, countries would have had to make politically painful adjustments to pension and healthcare programs.

Taken together, these factors make it easy to imagine gross domestic product growth at a percentage point below normal for another decade. If the Kasparov-Thiel-Gordon hypothesis is right, the outlook is even darker — and the need for reform more urgent. After all, most plans for emerging from the financial crisis assume that technological progress will provide productivity growth that will underpin sustained recovery.

So, is the main cause of the recent slowdown an innovation crisis or a financial crisis? Perhaps some of both, but surely the economic trauma of the past few years reflects, first, a financial meltdown, even if the way forward must simultaneously treat other obstacles to long-term growth.

© Project Syndicate, 2012. www.project-syndicate.org

Rogoff is professor of economics and public policy at Harvard University.