Stagnation is not an economic crisis

The economy is a dynamically developing sphere of human life. It can both progress and degrade, in addition to all this, its stagnation is possible. The situation, accompanied by stagnation, is defined as stagnation.

Thus, it turns out that stagnation is an economic situation characterized by a low GDP growth rate and a constant increase in the unemployment rate. Also during this period, the welfare of the entire population is declining.

Talking about what stagnation is, special attention should be paid to the structure of the economy. It is not subject to any changes, especially it affects the scientific and technological progress. The thing is that the economic situation is so vulnerable that it can not accept any innovations. The stagnation of the economy, in which high inflation is observed, is called stagflation.

In order to understand what stagnation is in a particular situation, it is necessary to trace the dynamics of GDP change in a few years. And if it is characterized by a value in the range of 2 to 3 percent, then we can safely talk about the coming stagnation. But still I want to note that there are exceptions to this situation, because the economic situation is heterogeneous and multifaceted.

Often people believe that stagnation is the same as the economic crisis. This opinion is erroneous, and to prove this, it should be noted that under the economic crisis, GDP is undergoing an incredibly sharp contraction, while stagnation is a period in which GDP simply does not increase or increase, but only marginally.

Economic stagnation is primarily connected with the name of the American economist Alvin Hansen. It was thanks to him that 1930 brought to the economic life such a term as stagnation, which in Russian means "century stagnation". This innovation is associated with a real stagnation in the US economy. To solve this problem, it was decided to expand the state's expenses and lead to a deficit in the state budget. This strategy worked, and the economic situation once again became its own. Stagnation of the economy did not pass by the USSR, and it became associated with the period when Leonid Brezhnev was in power. Stagnation in the USSR was characterized by an increase in inflation from 2.5 to 3 percent.

Based on the previously studied situations, it turns out that stagnation is a long-term situation that arises from the expenditure of all cheap and easily available resources that contribute to the continued growth of economic welfare. There is a scientific opinion that stagnation can go around the world and cover all countries simultaneously. For such a case, Tyler Cowen introduced the concept of "Great Stagnation." Such a situation will be devastating for the world economy, and in connection with this, it is necessary to do everything to avoid it. And for this it is necessary to maintain at the proper level the indicators affecting it. Thus, and the people will be happy, and the state will not have a headache about solving complex economic problems.