What Is Stagflation? Meaning & Example
Definition
Stagflation is the combination of slow economic growth, high unemployment and high inflation. It is hard to fix because tools that fight inflation can slow growth further.
Related terms
Inflation is the general rise in prices across an economy over time, which reduces what each unit of money can buy. Moderate inflation is normal, while high inflation erodes savings quickly.
RecessionA recession is a significant, widespread decline in economic activity lasting more than a few months. It often brings rising unemployment and falling business profits.
Unemployment RateThe unemployment rate is the percentage of the labor force that is actively looking for work but has no job. It is a key gauge of economic health.
What is Stagflation?
Stagflation is the combination of slow economic growth, high unemployment and high inflation. It is hard to fix because tools that fight inflation can slow growth further.
Can you give an example of Stagflation?
Rising prices alongside weak hiring and flat output would be described as stagflation.