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Stagnation |
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Stagnation Stagnation. Stagnation is a period during which the economy grows slowly, doesn't grow at all, or actually contracts after adjusting for inflation. Typically, there is a corresponding contraction in the stock market. As a result of a slowing economy, unemployment increases and consumer spending slows. Policymakers may fear a recession, and, in response, the central bank may try to stimulate growth by increasing liquidity and lowering interest rates. While stagnation is hard on the economy, it's more common and potentially less disruptive than stagflation, which combines slowing growth with rising inflation. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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