Economicscalendar_todayLast updated: Apr 2026
What is Stagflation?
/stæɡˈfleɪʃən/
Stagflation is the rare and painful combination of high inflation, slow economic growth, and high unemployment occurring simultaneously. It defies the usual economic trade-offs.
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Everyday Example
Imagine prices at the supermarket rising every week, but your company is not hiring (or is laying off staff) — that's what stagflation feels like to ordinary people.
publicReal-World Application
“The UK experienced severe stagflation in the 1970s following the OPEC oil crisis, with inflation hitting 24% while unemployment tripled.”
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Did you know?
Stagflation was thought impossible under Keynesian economic theory, which assumed inflation and unemployment moved in opposite directions. The 1970s proved the theory wrong.
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Key Insight
Stagflation is so hard to fix because the standard cures contradict each other — raising rates to fight inflation makes unemployment worse, and cutting rates to boost growth makes inflation worse.
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