Definition
- Stagflation
- Stagflation is an unhealthy combination of high unemployment and high inflation at the same time.
- Not to be confused with: Phillips curve
- The Phillips curve shows a trade-off between the unemployment rate and the inflation rate, so that when one is higher the other is lower.
Test yourself
What is the difference between stagflation and phillips curve?
The Phillips curve says high inflation comes with low unemployment; stagflation is both high at once.