Several readers have reacted to the Gross Domestic Product (GDP) report for the first quarter of this year and wondered about the possibility of stagflation occurring. They wanted to know what stagflation is and if we are about to experience it. Some economists — admittedly, a small % — have discussed the prospect of stagflation. Let me address this by first defining what stagflation is and then reviewing why some are pointing to the chances we might see it in the future. Stagflation is the combination of economic stagnation — slow economic growth as measured by GDP — and higher...
Several readers have reacted to the Gross Domestic Product (GDP) report for the first quarter of this year and wondered about the possibility of stagflation occurring. They wanted to know what stagflation is and if we are about to experience it. Some economists — admittedly, a small % — have discussed the prospect of stagflation. Let me address this by first defining what stagflation is and then reviewing why some are pointing to the chances we might see it in the future. Stagflation is the combination of economic stagnation — slow economic growth as measured by GDP — and higher...