Indicator simulation of a stagnating economy

Abstract

In recent decades the economies of developed countries were periodically exposed to crises and stagnation. Not only the depression of industrial production affects the development of stagnation, but also the problems in the labor force as well as the issues with creation of human capital. State’s financial and regulatory support are the main tools to overcome stagnation. The aim of this work is to obtain a system of differential equations that describes the change of the update rate of renewable factors of production and productivity in the economy at the approach to the state of stagnation. The papers studies the behavior of factors of production using vector analysis. The author obtained the inequality, which gives the conditions of overcoming the economic stagnation. This inequality shows that the rate of response to the need for investment has more impact on overcoming stagnation than the volume of investments. Production factors are closely interrelated; therefore, overcoming the phenomenon of stagnation in one of the factors does not guarantee the growth of the entire economy.