stagflation

noun

Etymology: Blend of stagnation + inflation, generally thought to have been coined by the British politician Iain Macleod (1913–1970) in a 17 November 1965 parliamentary speech: see the quotation.

1. Prolonged high inflation accompanied by stagnant growth, often with recession and high unemployment.

   “We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of "stagflation" situation and history in modern terms is indeed being made. There is another point behind the figures. As I say, production has fallen by 1 per cent. or ½ per cent.”

   “As soon as we understand how involuntary unemployment can result from rational and well-informed individual behavior, it also becomes obvious how inflation and unemployment—which we once thought could not occur simultaneously—can be combined, as they have been in the recent stagflation.”