“I keep hearing the term ‘stagflation’ mentioned. What is it, and are we about to see it happen?” The reader who posed this question raised an issue that is on the minds of many people. With inflation raging, interest rates rising, negative GDP for the first two quarters, and the ongoing battle in Ukraine, some economists are sounding the alarm for recession and possible stagflation. Stagflation is the combination of economic stagnation, or recession, and high inflation. It ravaged the U.S. economy during the 1970s. Under the older definition — in use for decades — we would be in a...

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