Difference Between Sagnation And Secular Stagnation

1) Secular stagnation can be considered as being a period where a market based economy suffers insignificant or no economic growth at all. In this case, the economy is unable to grow which leads to stagnation. However, the main difference between a structural stagnation and secular stagnation is secular stagnation affects the workers in a given country experiencing no economic growth while structural stagnation affects both unemployment in the country and constrained outputs in a global outlook. Some of the major headwinds of secular stagnation include decreasedspendingby both households and investorsas a whole and high rates of unemployment due to luck of jobs. In this case, as argued by Alvin Hansen, firms hold off on investing new capital due to low rates of population growth and inefficiency in technological growth. Hence, one might argue that secular stagnation brings about low population, unemployment and decreased demand. Secular stagnation can also be brought …show more content…
Trade defic9ite can be termed as being the leading cost of unemployment. This is because aggrieved supply brings about increased demand. However, if a country suffers from trade deficit, the national productivity gets affected. This affects the workers’ productivity since the country is producing more goods than it is selling. Hence, the end result is affects domestic employment in terms of massive layoffs so as to maintain a profitable output. Some of the majorchallenges brought about by structural stagnation while referring to macro policy include job growth, productivity, full employment, and labour force participation. One of the major economic factors that that macro policies depend on is increased demand. Increased demand, in this case, directly affectsindustrial productivity, hence, influencing employment and aggressive