Community Forex Questions
What is stagflation?
Stagflation refers to an economy that has significant inflation, high unemployment, and slow to no economic growth. The term is a combination of the words GDP stagnation and inflation.
Stagflation was common in most major economies during the 1970s and 1980s. This surprised economists because the dominant economic theory at the time, Keynesian macroeconomic theory, held that inflation and unemployment could not rise simultaneously.
This was partly based on the Phillips Curve, an economic model that was used to argue that unemployment and inflation had an inverse relationship. Many potential factors that influence stagflation have since been identified by economists, including a sudden supply shock and harmful government policies.
Stagflation was common in most major economies during the 1970s and 1980s. This surprised economists because the dominant economic theory at the time, Keynesian macroeconomic theory, held that inflation and unemployment could not rise simultaneously.
This was partly based on the Phillips Curve, an economic model that was used to argue that unemployment and inflation had an inverse relationship. Many potential factors that influence stagflation have since been identified by economists, including a sudden supply shock and harmful government policies.
Oct 03, 2022 14:29