Stagnation

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Stagnation2.jpg

Origin

Latin. stagn{a}t- ppl. stem of stagn{a}re to stagnate, to be overflowed, f. stagn-um pool

Definitions

b : stale <long disuse had made the air stagnant and foul — Bram Stoker>

2: not advancing or developing <a stagnant economy>

Description

Economic stagnation or economic immobilism, often called simply stagnation or immobilism, is a prolonged period of slow economic growth (traditionally measured in terms of the GDP growth). Under some definitions, "slow" means significantly slower than potential growth as estimated by experts in macroeconomics. Under other definitions, growth less than 2-3% per year is a sign of stagnation.

The term bears negative connotations, but slow economic growth is not always the fault of economic policymakers. For example, potential growth may be slowed down by catastrophic or demographic reasons.

Economic stagnation theories originated during the Great Depression and came to be associated with early Keynesian economics and Harvard University economics professor Alvin Hansen.