What is Stagflation, Define of Stagflation
The word stagflation is the combination of two words Stag from stagnation and flation from inflation. In stagflation both the higher level of employment and inflation are attached. It is therefore, also called “Inflationary recession.” Keynesian define stagflation as it occurs due to rise in cost of production or fall of supply. If the supply goes downward it will certainly affect the price level which will go higher, it will also reduce the employment. This may result the stagflation.