Economic stability refers to an absence of excessive fluctuations in the macroeconomy. An economy with fairly constant output growth and low and stable inflation

Inflation

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

 would be considered economically stable. An economy with frequent large recession

Recession

In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...

s, a pronounced business cycle

Business cycle

The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...

, very high or variable inflation

Inflation

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

, or frequent financial crises

Financial crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these...

 would be considered economically unstable. The United States or Greece is an example of an unstable economy.

See also

• Business cycle
  Business cycle
  The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
  
  
• Financial crisis
  Financial crisis
  The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these...
  
  
• Monetary policy
  Monetary policy
  Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
  
  
• Fiscal policy
  Fiscal policy
  In economics and political science, fiscal policy is the use of government expenditure and revenue collection to influence the economy....
  
  
• Automatic stabilizer
  Automatic stabilizer
  In macroeconomics, automatic stabilizers describes how modern government budget policies, particularly income taxes and welfare spending, act to dampen fluctuations in real GDP....
  
  
• Stability and Growth Pact
  Stability and Growth Pact
  The Stability and Growth Pact is an agreement among the 27 Member states of the European Union that take part in the Eurozone, to facilitate and maintain the stability of the Economic and Monetary Union...