What is Stagflation?

Someone recently asked me to explain the term “Stagflation."

Some of you probably remember the Nixon years, the early 1970s. This is the period when Stagflation was flagrant. It’s simply the combination of two words, stagnation and inflation.

Everyone seemed shocked that both could occur at the same time. This is because back then (and still in the minds of a few today), a Keynesian theory called the Phillips Curve was in vogue. It said that “inflation and unemployment have a stable and inverse relationship.”

https://www.investopedia.com/terms/p/phillipscurve.asp

But in fact this turned out not to be true, since in the early 1970s we had high price inflation and high unemployment combined with low GDP, which by itself is often described as stagnation.

The term “stagflation” was first used by an Englishman, according to this website. The article gives such a good description of the issues involved that I really think you would find it interesting.