Talking Stagflation With My Daddy
Next time, I’ll be a better daughter instead of an economic data junky
“Inflation’s through the roof. Gas prices are sky-high. They’re talking about stagflation,” my daddy said. The words tumbled out in a single breath as if building to a horrific prophecy of economic doom. Instead, the conversation shifted to the price of canned pinto beans costing more than $0.50.
Five minutes into the conversation, he repeated the word “stagflation.” In between talks about price hikes for gas, groceries, garden seed, chicken food, and dog food, stagflation popped up again and again.
“Daddy, we don’t have stagflation.” These words popped out of my mouth sometime around the fifth mention.
“The news…” His following words were lost in a red haze as I visualized beating a news anchor over the head with a dictionary.
We don’t have stagflation. Is it possible? Yes. Is the US Economy at a higher risk of stagflation? Yes. The World Bank has some concerns.
Here’s the huge but. Stagflation is characterized by slow or negative growth with inflation and high unemployment. For example, in 1974, US GDP growth fell to negative 0.5%, unemployment rose to 7.2%, and inflation hit 11.04%. That’s inflation measured by the consumer price index…
