Economic Stagnation: What Causes Slowdowns Of Economy Growth?

Economic stagnation is a long-term gradual economic growth, often accompanied by high unemployment. If economic growth slows down, it will fall into a crisis of recession

Stagnation, also known as fixation, is measured by the growth of GDP, or rather lack of growth. Under such conditions, GDP, profits, and most incomes have rarely increased, but bankruptcy and unemployment are on the rise.

Economists say the United States has experienced a stagnant situation since the financial crisis in 2009. Economic recession in Japan has also been seen, the EU countries have experienced the so-called economic cycle stagnation, the economic recovery has slowed down compared to the United States.

It is easy to observe the slowdown of the economy, but finding the root cause of the problem is more difficult. Economists have various theories to explain stagnation

Long-term stagnation: used first to describe the theory that the Great Depression, population growth, changes in game rules, lack of ground expansion, or massive war brought about long-term stagnation of the United States and other developed countries it was done. Economy

The limit of growth: The theory thinks from the ecological point of view that there is a fundamental limit to economic growth - this is only when the economy slows down and is delayed at a specific point in time, human survival and resources Distribution means sustainable.

Technology slowdown: According to theory, the speed of technology advances and the slowing of the impact are related to the slowing down of economic progress.

Economic inequality: Some people argue that expansion of the disparity between rich and poor people is hindering economic growth. Where most wealth is managed in a small proportion of the population, wages and consumer purchasing power are affected and the entire economy is affected.

Today, the GDP of the United States is expected to grow by 2-5% over the next 10 years.

In Europe, the situation is a bit complicated. In 2013, nine countries will fall into recession and the fragile economic recovery in the euro area is expected to increase by only 1 to 5%.

Germany was once regarded as the economic engine of the European Union and the economic growth forecast for 2015 fell to 3%.

Due to various factors, the stagnation of Japan has brought extremely low growth rates over the past two decades. Government borrowing to support the people's gross domestic product has brought a sacred economy than it is difficult to rectify

Regardless of the cause of stagnation, it can be observed at different speeds in other countries of the world and solutions to the underlying cause of these problems may be almost and far away. At present, some of the world's largest economies are economical

Stagnation is a long-term period with little or no economic growth. As emphasized by high unemployment rates and involuntary part-time employment, economic growth below 2% to 3% per year is considered to be stagnant. In certain industries and companies, stagnation can occur even on a small scale. Stagnation is an economic form when total production decreases, level off, or slightly increases. Continued unemployment is also characterized by economic stagnation. Stagnation, however, does not constitute a recession. On the contrary, stagnation leads to flat employment growth, no wage growth, and lack of market prosperity or high price. This is different from the economic recession in which all three factors fell sharply.

US economy after the crisis: delay in recovery and long-term stagnation * Robert A. Brecker, Professor of Economics, Washington, DC, USA 200116 Revised in March 2016 Summary: Long-term growth in the US economy slows down job creation before the Great Depression I was allowed to. The stagnation in production growth is mainly due to intensified inequality in suppression of aggregate demand and the fundamental cause of inequality and separation of employment and production is the serious structural change of the American industrial structure and international status It is in. Prior to the financial crisis, fund procurement by household debt temporarily offset the stagnation trend, but then the family financially strained. At the same time, despite the low interest rate, fiscal policy turns to austerity and corporate investment has not kept up with corporate earnings. Contact to the author E-mail: blecker@american.edu