{"id":5617,"date":"2022-07-17T10:31:08","date_gmt":"2022-07-17T10:31:08","guid":{"rendered":"https:\/\/www.politicsphere.com\/?p=5617"},"modified":"2022-07-17T11:29:08","modified_gmt":"2022-07-17T11:29:08","slug":"what-is-stagflation-economy","status":"publish","type":"post","link":"https:\/\/www.politicsphere.com\/what-is-stagflation-economy\/","title":{"rendered":"What Is Stagflation Economy?"},"content":{"rendered":"\n

Stagflation is an umbrella term that brings together the words stagnation and inflation. Stagnation in the country will lead to a decrease in the output of goods and services. The population suffers when prices increase rapidly, but economic growth is tanking. A host of problems can occur, such as high unemployment.<\/p>\n\n\n\n

The events of stagnation unfold in a similar way to a self-fulfilling prophecy. Ordinary citizens in the country will often drive speculation causing households and businesses to worry. The panic within the economy will change human behavior to ensure inflation will continue to rise. With decreased confidence in the economy, inflation will continue to soar as time goes on.<\/p>\n\n\n\n

The original definition of Stagflation was invented in the 1960s. During this period, there were shocks to the oil prices weekly. Economists and central bankers coined the term after Iain Macleod mentioned it in the House of Commons. It describes a time of unusually high inflation and weak economic growth.<\/p>\n\n\n\n

An economy facing a recessionary period with inflation doubling until it hits double digits will heavily affect consumers. Economists often use the misery index to scientifically measure the simple sum of the inflation and unemployment rates. This measurement tool helps explain how the citizens feel about the economy.<\/p>\n\n\n\n

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Which U.S. presidents had to deal with Stagflation?<\/h2>\n\n\n\n

The last major Stagflation experienced in the United States lasted from 1965 until 1982. During this period, three presidents served in the position; however, two mainly dealt with Stagflation. Richard M. Nixon and Jimmy Carter experienced this stagflation between 1974-1975 and 1978-1982. <\/p>\n\n\n\n

What is an example of Stagflation?<\/h2>\n\n\n\n

The most recent example of Stagflation was experienced during the 1970s in the United States. <\/p>\n\n\n\n

Close to the end of the 1960s, many economic gains during post-World War II slowed down. The international market had begun to boom, and local producers faced stiff competition from other nations. Greater global competition leads to a decrease in manufacturing jobs. The rise in unemployment and excessive government expenditure in Vietnam lessened the value of the United States dollar. A weakened currency chasing a smaller amount of goods leads to inflation climbing. The growing consensus in America was a lack of faith in the currency. President Richard Nixon implemented economic measures to stabilize the economy by creating job opportunities, remedying inflation, and protecting the U.S. dollar to rectify the free-falling inflation. <\/p>\n\n\n\n

The measures applied by President Nixon were as follows:<\/p>\n\n\n\n