GLOSSARY OF TERMS
The current economic crisis has brought these esoteric terms into mainstream conversation.
| TERMS | | Stagflation | | |
Stagflation occurs in economic circumstances where inflation and economic stagnation occur simultaneously and endures for an extended period. It can be marked by slow economic growth and relatively high unemployment, accompanied by a rise in prices, or inflation. In other words, the economy isn't growing but prices are. An example was the situation that occurred during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries.
In the past year, record-breaking prices for oil and other commodities such as grains and metals caused serious concerns about runaway inflation. But as the economic slump worsened, economists began to talk about the possibility of stagflation where prices would continue to rise despite slow economic growth.
|
|
