By: Adrian Khiat The Birth of the word "Stagflation" The word stagflation was a portmanteaus introduced in Britain by a member of the Conservative party during a House of Common Speech on 17th November 1965. A portmanteaus are blended words formed by 2 words of different meaning into another unique and new word. Other examples of Portmanteaus are "Bombay + Hollywood = Bollywood", "Medical + Care = Medicare", "Web + Log = Blog", etc What is Stagflation? * My title has explain it. It is the state of a country where its economy faces stagnation coupled with a high inflationary situation. Stagnation = Slow or no growth. Inflation = Rises in price. * In economics, we learn that supply and demand usually come to a point where an equilbrium price is set. But when demand is too fast or supply cannot cope with demand, the price simply cannot come down. * Example, Short supplies of essential commodities like oil and food or an overheated economy with loose monetary supply that leads of excessive demand and increase in wages. When the economy is supposed to cool down, wages, being downwards sticky couldn't come down and it result in unemployment. Read more...