Stagflation

key terms

Mouse-over a link for a quick definition or click to read more in-depth!

economic fluctuations

Stagflation is a period in which inflation is abnormally high and output is less than the natural rate of output.

Stagflation is the result of a negative shock to the short-run aggregate supply curve.

The United States and Europe experienced stagflation during the oil shocks in the late 1970s and early 1980s.

Combating stagflation in the short run involves coordinated monetary and fiscal policy.

« Back to the top