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poyndexter

40,111 Posts.

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16/01/18

11:31

Post #: 30336101
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Originally posted by peteai ↑

I understand stagflation is where you have both high inflation and high unemployment e.g as in the late 70's which perplexed economists because that was not meant to happen.

Now we have quite low inflation (remember in the 70s > 10% was common) and low unemployment. Sort of the opposite to stagflation

The answer to your question however is complex, but can be partly explained in that you are focusing onlu on the supply side and neglecting the demand side. e.g our historically low interest rates lead to more money in the system which leads to higher demand

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Thanks for the reply Peteai.

Hasn’t globalisation put cheap widgets into the system that increasingly few can afford to buy?

Dex
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