Wednesday, April 20, 2005

Is Stagflation Here?

Steve Soto of The Left Coaster thinks so. He makes as good a case as any. We have rising inflation and economic weakness. If the Fed increases interest rates to stem inflation, they will kill economic growth, but if they keep rates low to encourage growth, inflation gets out of control.

At least, gay people can't marry.

So, what is stagflation?

Stagflation=inflation increase + stagnant economy

Normally, inflation is a problem for overheating economies, i.e, an economy that is doing very well.

Investopedia on Stagflation

Here's Wikipedia on stagflation

Here's Prof Brad DeLong of Berkeley on Stagflation (cool flash supply/demand graphic)


Post a Comment

<< Home