High Inflation Stagnation Period

An High Inflation Stagnation Period is a no economic grow period that is also a high inflation-rate period.

• AKA: Economic Stagflation Period.
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• Example(s):
  • The U.S. Stagflation of 1973-1975.
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• Counter-Example(s):
  • The Great Recession of 2008-2009.
  • an Economic Recession Period.
  • a Low Inflation-Rate Period.
• See: High Unemployment Period, Economic Stagnation, Recession, Inflation Rate, Economic Policy.

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References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Stagflation Retrieved:2014-4-29.
  • Stagflation, a portmanteau of stagnation and inflation, is a term used in economics to describe a situation where the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. It raises a dilemma for economic policy since actions designed to lower inflation may exacerbate unemployment, and vice versa.

    The term is generally attributed to a British politician who became chancellor of the exchequer in 1970, Iain Macleod, who coined the phrase in his speech to Parliament in 1965.

    In the version of Keynesian macroeconomic theory which was dominant between the end of WWII and the late-1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve. Stagflation is very costly and difficult to eradicate once it starts, in human terms as well as in budget deficits.

    In the political arena, one measure of stagflation, termed the Misery Index (derived by the simple addition of the inflation rate to the unemployment rate), was used to swing presidential elections in the United States in 1976 and 1980.

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