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A period of slow economic growth, or, in securities trading, a period of inactive trading.


A period where an economy grows at an extremely low rate without actually entering a recession. During stagnation, it is unlikely that jobs will be created, wages will increase, or that the stock market will boom. While there is no exact definition of economic stagnation, most analysts agree that positive growth under 2%-3% qualifies. It may occur because a business cycle is winding down, because a catastrophic event has caused economic uncertainty, or for any number of other reasons. Classical Keynesian economics states that stagnation will result in a period of low inflation because there is no growth in demand for money, but American stagnation in the 1970s also saw a period of high inflation. See also: Brezhnev Stagnation, Stagflation.


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.


References in periodicals archive ?
Photo: LPGA commissioner Jim Ritts says, ``In the past 12 months our business has not stagnated and has not receded.
Laundry care failed to boost sales through the year as average unit prices stagnated through a combination of a lack of new product development and continued price competition between multiple grocers Tesco, Sainsbury's and Asda.
LONDON -- GDP stagnated in Q3, according to French statistical office (INSEE), following a remarkably strong 1.
According to In-Stat's "Voice and Networking Trends 2005" survey, traditional PBX and key systems integration has stagnated, while IP solutions have gained favor over the last year.
In recent quarters the consumer market for WLAN equipment has stagnated, especially from a revenue perspective, because 802.
In fact, Sallie Mae's origination volume has soared in the last few years while the joint venture's volume has stagnated.
Under a stable rate structure, operating revenues stagnated as the authority relied increasingly on the sales and use tax to meet its needs.
The mobile phone market in Eastern Europe offers enormous growth potential: While markets in Western Europe either stagnated or grew only in the single-digit range last year, the number of mobile communication users soared year on year in many of the region's countries: By 23 percent in the Czech Republic, by 40 percent in Poland, and by more than 120 percent in the region's largest market, Russia, where the number of mobile phone users rose from 8.