Stagflation
Stagflation is a situation in an economy when inflation and unemployment both are at higher levels, contrary to conventional belief. Such d a situation first arose in the 1970s in the US economy and in many Euro-American economies. This took place as a result of oil price increases of 1973 and 1979 and anticipation of higher inflation. The stagflationary situation continued till the early 1980s. Conventional thinking that a trade-off existed between inflation and unemployment ( Phillips Curve) was falsified and several economies switched over to alternative ways of economic policies, such as monetaristic and supply-side economics.
When the economy is passing through the cycle of stagnation and the government shuffles with the economic policy, a sudden and temporary price rise is seen in some of the goods-such inflation also known as stagflation. Stagflation is basically a combination of high inflation and low growth"
