What Is Stagflation?
Stagflation is an economic situation that combines high inflation with slow or stagnant economic growth and relatively high unemployment. It is difficult to address because measures that reduce inflation can slow growth further, while measures that boost growth can add to inflation.
A Well-Known Example
Many advanced economies experienced stagflation in the 1970s, when oil price shocks raised prices while growth slowed.
Effect on Households
Prices rise faster than incomes in many cases, reducing purchasing power.
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.