Macroeconomic analysis of stagnation

Abstract

The article shows how the process of stagnation of the world economy developed in the XXI century, and also analyzes the measures taken by the state support for economic recovery and ensuring stable economic growth. The growth of the world economy in 2010-2019 was replaced by stagnation in 2020. The COVID-19 pandemic, the deterioration of relations between China and the United States, the emergence of a political crisis in the Middle East and Brexit caused a reduction in trade and investment. Based on the analysis of macroeconomic indicators of European and Japanese countries, the authors believe that secular stagnation is a steady trend of lowering the real interest rate, which leads to a constant gap in GDP and slow economic growth. The most effective way to combat secular stagnation is to increase aggregate demand. Fiscal policy can stimulate the economy through significant public spending, inclusive social programs and the fight against economic inequality. It is proved that it is impossible to approach the potential output during the period of secular stagnation. The logical result of the study was the conclusion that in order to reduce the period of stagnation, it is necessary to develop a state program using the tools of monetary and fiscal policy.