and Finance glossary of business terms and commonly used words.
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Glossary of Finance Terms - Stagflation
: Stagflation results when a
or economic stagnation, is combined with
inflation (decrease in value of the currency).
This usually occurs when governments promote
inflation (which is often seen as a positive
result of a growing economy) and increase
the money supply at a time when the economy
is relatively stagnant as a result of either
government regulations of goods or services
or other economic inhibitors.
The term "stagflation"
was first used by Iain Macleod in the British
Parliament in 1965 when he was referring
to the postwar recession and inflation.
At the time, some politicians and critics
blamed the governments for printing too
much money and at the same time having too
many regulations on prices and goods. In
general, most politicians choose to solve
either the recession or the inflation but
rarely try and solve both parts of stagflation
Also called : Stagflationary Economy,