stagflation

(noun)

Inflation accompanied by stagnant growth, unemployment, or recession.

Related Terms

  • static
  • supply shock
  • nominal
  • Phillips curve
  • protectionism
  • inflation

Examples of stagflation in the following topics:

  • Shifting the Phillips Curve with a Supply Shock

    • Stagflation caused by a aggregate supply shock.
    • Stagflation is a combination of the words "stagnant" and "inflation," which are the characteristics of an economy experiencing stagflation: stagnating economic growth and high unemployment with simultaneously high inflation.
    • The stagflation of the 1970's was caused by a series of aggregate supply shocks.
    • The resulting decrease in output and increase in inflation can cause the situation known as stagflation.
  • The Taylor Rule

    • For example, in times of stagflation, inflation may be high while unemployment is also high.
  • Arguments For and Against Discretionary Monetary Policy

    • However, following the stagflation of the 1970s, policymakers were attracted to policy rules.
  • The Short-Run Phillips Curve

    • However, the stagflation of the 1970's shattered any illusions that the Phillips curve was a stable and predictable policy tool.
  • Alternative Views

    • Neo-Keynesian economics is often confused with 'New Keynesian' economics (which attempts to provide microeconomic foundation to Keynesian views, particularly in light of stagflation in the 1970s).
    • Stagflation (economic stagnation and inflation simultaneously) created issues with this however, necessitating New Keynesian ideas (as discussed briefly above).
  • Impacts of Policies and Events on Equilibrium

    • A negative supply shock can cause stagflation due to a combination of raising prices and falling output .
    • This supply shock in turn contributed to stagflation and persistent economic disarray.
  • The Phillips Curve

    • For many years, both the rate of inflation and the rate of unemployment were higher than the Phillips curve would have predicted, a phenomenon known as "stagflation. " Ultimately, the Phillips curve was proved to be unstable, and therefore, not usable for policy purposes .
  • Volcker Disinflation

    • During his time as chairman, Paul Volcker led the Federal Reserve board and helped to end the stagflation crisis of the 1970s.
  • The Long-Run Phillips Curve

    • The NAIRU theory was used to explain the stagflation phenomenon of the 1970's, when the classic Phillips curve could not.
  • Years of Change: The 1960s and 1970s

    • The term "stagflation" -- an economic condition of both continuing inflation and stagnant business activity, together with an increasing unemployment rate -- described the new economic malaise.
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