Definition of Stagflation:
Persistent high inflation combined with high unemployment and stagnant demand in a countrys economy.
The term "stagflation" was first used during a time of economic stress in the United Kingdom by politician Iain Macleod in the 1960s while he was speaking in the House of Commons. At the time, he was speaking about inflation on one side and stagnation on the other, calling it a "stagnation situation." It was later used again to describe the recessionary period during the 1970s following the oil crisis, when the U.S. underwent a recession that saw five quarters of negative GDP growth. Inflation doubled in 1973 and hit double digits in 1974; unemployment hit 9 percent by May 1975.
Stagflation is a seemingly contradictory condition described by slow economic growth and relatively high unemployment, or economic stagnation, which is at the same time accompanied by rising prices (i.e. inflation). Stagflation can also be alternatively defined as a period of inflation combined with a decline in gross domestic product (GDP).
Stagnation accompanied by inflation. It is an economic anomaly where high unemployment (due to economic stagnation) is accompanied by high inflation (instead of low inflation due to falling demand). Triggered first in 1973 by the OPECs four-fold increase in oil prices (which raised all prices, thus slowing economic growth) it was exacerbated by traditional fiscal and monetary policies with which the governments tried to reduce unemployment levels.
Synonyms of Stagflation
Recession, Slump, Decline, Downturn, Slowdown, Standstill
How to use Stagflation in a sentence?
- Since the 1970's, rising price levels during periods of slow or negative economic growth have become somewhat of the norm rather than an exceptional situation.
- Stagflation refers to an economy that is experiencing a simultaneous increase in inflation and stagnation of economic output.
- When your money isnt growing but inflation is you can find yourself in a state of stagflation where you are losing while breaking even.
- Due the the prior Presidents term, his administration has been accused of stagflation . During my time in office, i promise to create a jobs bill.
- In economics class, they learned about a variety of subjects including stagflation and its effects on people and society in general.
- Prevailing economic theory at the time could not easily explain how stagflation could occur.
- The result was stagflation; tighter monetary policy that did not reduce inflation, but it did lead to a small recession that increased unemployment.
- Stagflation was first recognized during the 1970's, where many developed economies experienced rapid inflation and high unemployment as a result of an oil shock.
Meaning of Stagflation & Stagflation Definition