Stagflation Meaning: Definition, Examples, and Translations
๐๐ฐ
stagflation
[stรฆษกหfleษชสษn ]
Definition
economic condition
Stagflation is an economic condition characterized by a combination of stagnant economic growth, high unemployment, and high inflation. It poses a significant challenge for economic policy, as the measures that may control inflation might exacerbate unemployment and vice versa.
Synonyms
economic stagnation, inflationary recession.
Examples of usage
- The country is currently facing stagflation.
- Stagflation is difficult for governments to manage.
- Many economists believe stagflation could return.
- Historical stagflation occurred in the 1970s.
Translations
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Origin of 'stagflation'
The term 'stagflation' emerged in the 1960s during a period of rising inflation and rising unemployment in the United States and the United Kingdom. It combines the words 'stagnation' and 'inflation' to describe a unique and challenging economic condition that defies conventional economic theory. Prior to its popularization, economists believed that inflation and unemployment had an inverse relationship, famously illustrated by the Phillips curve. However, the experiences of the 1970s, particularly the oil crises leading to high prices while economies stagnated, demonstrated the possibility of both high inflation and high unemployment occurring simultaneously. The popularity of the term reflects a significant turning point in economic thought, as policymakers grappled with how to address the complexities of stagflation.