Stagflation is a condition in which there is a high rate of inflation, a poor rate of economic growth, and a high rate of unemployment.
In terms of economics, stagflation, sometimes known as recession-inflation, is a state in which unemployment is consistently high, the economy is growing slowly, and the inflation rate is high or rising. It creates a conundrum for economic policy because measures taken to reduce inflation may make unemployment worse.
Slower economic growth, increased unemployment, and higher prices together make up stagflation.
According to economic theory, these two things shouldn't be combined. Prices shouldn't increase as people's disposable income decreases.
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