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

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
With most households continuing to face stagnating or falling incomes -- and with younger generations thus on track to be poorer than their parents -- such solutions are urgently needed.
E-gels can be created by dead spots in the extruder--e.g., stagnating regions in the screw.
Eagle Eye's data did establish a correlation between contract bundling and stagnating SB revenues from the federal government.
A drive to persuade the Government to breathe life back into Britain's stagnating town centres was launched today to coincide with the birth of the new Regional Development Agencies.
"But as a fellow Catholic, I believe in just wages and an equitable distribution of profits." He expressed his concern about an economy where corporate chief executives' salaries are skyrocketing while most working people's are stagnating.
Last June, for example, European Union leader Jacques Delors made a speech in Copenhagen in which he blamed the stagnating economies of the E.U.
Summary: After stagnating in the first two months of the current year at 4.6%, inflation rose again in March to 4.8%, announced the National Institute of Statistics (INS).
Member states with high but stagnating or declining competitiveness: Belgium, the United Kingdom, Austria, France, Italy, Luxembourg, Sweden and Finland.
Although the doors to the EU are closed for Macedonia and the country is stagnating in the Euro-integration process, Foreign Minister of Albania Ditmir Bushati told his Macedonian counterpart Fatmir Besimi that he is encouraged by the programme and ambitions of the coalition partners in the Macedonian Government who promised advancement in the integration.
Summary: Lebanon's real estate sector is stagnating amid an overall economic slowdown and an unstable political and security situation.
A commission chared by Archbishop of York Dr John Sentamu warned that spiralling living costs and stagnating wages were creating a "double squeeze" on the lowest paid.
At a Senate Banking Committee hearing, Credit Suisse said that activities in dark pools, private venues that don't post investors' buy and sell orders, were stagnating.