Ali Chmabers2024-03-25T22:22:29+00:00Stagflation can only occur if government policies disrupt normal market functioning. Stagflation occurs when high inflation happens during a period of stagnant economic growth and high unemployment. Stagflation presents a challenge to policymakers because the tools used to combat inflation typically raise unemployment and vice versa. Turning the current inflation problem into stagflation would require two further ingredients. First, inflation would have to become persistent, so that the economy adjusts to accept and expect a higher rate of inflation each...
