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Stagflation

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Stagflation
A condition of slow economic growth and relatively High unemployment - a time of stagnation - accompanied by a rise in prices, or Inflation.
    
Stagflation is a period of Inflation combined with stagnation (that is, slow economic growth and rising unemployment), generally including Recession.The  term "stagflation" is generally attributed to British Conservative MP and later Chancellor of the Exchequer Iain Macleod who coined the term in a speech to Parliament in 1965.
    
Stagflation can result when an economy is slowed by an unfavorable supply shock, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable.Or both stagnation (Recession) and Inflation can result from inappropriate macroeconomic policies.
    
Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp Inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects.
Posted by  marcus evans (Europe) Ltd
 
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