Guide Note:

Economic stagnation often refers to a sustained period of slowed economic growth. A measure used in gauging whether the economy is experiencing a period of stagnation is the Gross Domestic Product. In the 1970s, the United States experienced growth of 3% or less, which was considered to be stagnation.¹

Fast Facts:

1. Gross Domestic Product = consumption + gross investment + government spending + (exports − imports)
2. Current GDP is the gross domestic product in a current price model
3. Nominal GDP is the gross domestic product in prices without any adjustments
4. Real GDP is the gross domestic product in terms of adjusted prices
5. Keynesian definition of stagnation is a decrease in effective demand or effective buying capacity²
6. 2007 real GDP was 2.2% totaling $13.84 trillion³