Macro glossary

Stagflation

The simultaneous occurrence of high inflation, high unemployment, and stagnant demand.

Definition

Stagflation describes the macroeconomic regime of the 1970s: persistently high inflation combined with rising unemployment and weak growth. The Phillips curve, which assumes a tradeoff between the two, breaks down under stagflation. Supply shocks (oil, labor, geopolitics) are typical catalysts.

Origin: Iain Macleod (1965), UK politician.

Related indicators

Unemployment Rate

Track the U.S. unemployment rate. Rising unemployment above 0.5% from cycle lows triggers recession

Fed Funds Rate

Track the Federal Reserve's benchmark interest rate. Rate cuts after sustained hiking cycles often s

Related terms

Recession

A significant, broad-based, sustained decline in economic activity lasting more than a few months.

Soft Landing

A scenario in which monetary policy slows inflation without causing a recession.

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