Structural Stagnation Hypothesis

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This, in essence, is the period in an economy that experienced a recessed kind of growth, followed by stagnation. The US experienced this situational change in business in December 2007 and was not a good sight to behold. The economy downturn was followed by high-end unemployment rates whereby; most people became jobless since the business cycle was completely retrogressive (Baker & Bernstein, 2014). The output factor in the market system also fell, and the government tried ways by which it could curb the situation, but it was, unfortunately, disabled (Arestis and Elias, 2010, pg. 266). It has been properly assayed that this particular economic disaster was more than a recession because a normal recession is reciprocative of the inputs of expansionary …show more content…
There are a number of hypotheses as to why this crisis occurred that try to explain to us why this economic nightmare took place in the US. One of the hypotheses is spelled out below. The Structural Stagnation hypothesis tries to connect the economic loom in America with the immediate structural problems that could be as a result of globalization. Economists have relayed to us that this hypothesis regarding the macro economy, could be classified as either a conventional or unconventional hypothesis. Moreover, this hypothesis is proven to have both short-run and long-run causes. As we can discern from my first statement, it is quite obvious that one of the long-run cause that it is tied to this hypothesis is globalization. This period of international integration in the economic realm was one of the long-run causes of the recession. Other factors intricately tied to a long-run situation in this …show more content…
The aspect of people being segregated in terms policy-making and how they are perceived leads to unemployment spectacles. When people are looked down upon on the basis of race, education, sex, religion and political affiliations, they are to some extent radicalized and face certain bottlenecks. These kinds of bottlenecks are also amplified in the employment sector and thus result in the lack of job opportunities. Unemployment being a perennial problem can be reduced by various measures as described by various economies. One of the measures is apprenticeship whereby; people gain experience in the field and result in employing themselves and at the same time creating employment. Another suggestion towards employment has been through the college expansion strategy. It is an effort that has been applauded; however, it did not show any form of improvement towards inequality (Colander,

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