Stagnation is not a goal pursued in the game of Economics.
Stagnation is a period when an economic is faced with little or no growth. When there is little or no growth for a long period of time, such economy is experiencing stagnation.
An economy that records less than 2 to 3% yearly is going through a period of stagnation. Economy growing through stagnation is faced with high involuntary part-time employment and unemployment. Stagnation does occur in specific companies or industries, though it is sometimes on a smaller scale.
Stagnation can occur in an economy where the total output is declining. It does not make a recession but can result in no salary increase and flat job growth.
Sometimes, stagnation can occur naturally and unnaturally in an economy. It is natural when the economy cycle moves in downward trends and unnatural if unpleasant or disastrous event result in economic certainty.
Stagnation can occur in both developed and underdeveloped economy. If stagnation occurs in a stable and matured economy, it could be more permanent than having such experience during normal business cycle. This type of stagnation is referred to as stationary stagnation.
If stagnation occurs in underdeveloped economy, it could result into static equilibrium and this can cause long-term stagnation.
LEARN MORE:
KEYWORDS:
- stagnation
- static equilibrium
- stationary stagnation
- economics
- stable economy
