Define: Stagflation

UK Accounting Glossary

Definition: Stagflation


Quick Summary of Stagflation


In economics, stagflation, or recession-inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment, and vice versa.



What is the dictionary definition of Stagflation?

Dictionary Definition


A combination of slow economic growth with rising prices.

Both the UK and US experienced stagflation in the 1970’s.


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Full Definition of Stagflation


In economics, stagflation, or recession-inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment, and vice versa.


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Examples of Stagflation in a sentence


Stagflation is a portmanteau word made of stagnation and inflation.

Stagflation can be a harbinger of economic doom.

Stagflation is a mix of high unemployment and economic stagnation alongside inflation.

This policy will be difficult to implement whilst in a period of stagflation.

Many of the local boutique stores have been driven out of business as a result of stagflation

I am scared the world is entering yet another decade of stagflation.

Ignore the bull in the stock market; the world is heading towards long term stagflation.


Stagflation FAQ's


What causes stagflation?

Stagflation is often caused by cost-push inflation. Cost-push inflation occurs when some force or condition increases the costs of production. This may be due to government policies (such as taxes) or as a result of purely externalised factors such as a shortage of natural resources or an declaration of war.


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Definition Sources


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This glossary post was last updated: 4th May 2019.