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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 ?
In Peru and Colombia, sales have stagnated and their recovery remains uncertain.
Asia's economic troubles are lapping at American shores: In the year's first quarter, incomes stagnated in U.
Now payments on those creative mortgages have ballooned; home prices stagnated, and homeowners' equity eroded.
While our wages stagnated, the cost of living rose by 12 percent.
As home prices have stagnated, equity eroded, and mortgage payments adjusted higher, these homeowners have little other option to foreclosure.
Since 1991, the growth in family income has stagnated, falling far below increases recorded during any four-year period of economic growth since 1960.
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.
In the past 12 months our business has not stagnated and has not receded.
LONDON -- GDP stagnated in Q3, according to French statistical office (INSEE), following a remarkably strong 1.
Prescription sales of both the nation's four nicotine patches and Nicorette have stagnated in recent years as the withdrawal symptoms held smokers' success in quitting to about 20 percent.