Stagflation

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DEFINITION of 'Stagflation'

A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.

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BREAKING DOWN 'Stagflation'

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.

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RELATED FAQS
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    A wage-price spiral is an economic cycle in which rising wages increase consumer demand, causing prices to rise. Rising prices ... Read Full Answer >>
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    Stagflation is a type of economic malaise in which a stagnant economy coincides with high inflation for a period of time. ... Read Full Answer >>
  4. What are the primary reasons stagflation is unlikely to re-occur in the United States?

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