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Sunday, August 31, 2008


This is the new word that I came across today

Stagflation is an economic condition where the economy faces stagnation and inflation simultaneously. In macro economics, Inflation and Recession are considered to be mutually exclusive. However, during 1970s, the worlds economy and thus India's too; went into a simultaneous Recession and Inflation.

Economists consider Stagflation is a rare scenario and thus is difficult to get out of. If we attempt to treat the inflation, then the recession worsens and vice versa.

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