What is stagflation?
Stagflation combines weak growth or stagnation with high inflation.
Definition, calculation and mechanism
A supply shock may raise costs and prices while reducing output. Expectations and policy responses matter. High inflation alone is not stagflation; growth and labor data must also be examined.
Interpretation, examples and limits
Cooling demand can help prices but may weaken activity in the short run. No single tool addresses every cause. Price levels, output and unemployment can move on different timelines.
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