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Stagflation

A stalled or shrinking economy combined with fast-rising prices.

How to read the number

The worst arrangement a central bank can face: easing feeds prices, tightening finishes off output. The textbook case is the oil-importing economies after the shock of 1973.

When the metric lies

The word is used more loosely than it should be — one weak quarter alongside dearer imports does not amount to stagflation.

Also known as: stagflationary scenario

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