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Why did economists invent the term stagflation to describe the economic problems in the United States during the 1970?
Wiki User
∙ 9y ago
to describe a situation caused by a weak economy and rising prices
Wiki User
∙ 9y ago
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it created economic problems.
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Carter and Ford both faced economic problems but neither could solve the problems.
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Why did economists invent the term stagflation to describe the economic problems in the US in the 1970s?
to describe a situation caused by a weak economy and rising prices
Why did the economists invent the term stagflation to describe the economic problems in the US during the 1970?
to describe a situation caused by a weak economy and rising prices
Why did economists invent the term stagflation to describe the economic problems in the US during the 1970s?
to describe a situation caused by a weak economy and rising prices
Why did economists invent the term stagflation to describe the economic problems in the US during the 1970's?
to describe a situation caused by a weak economy and rising prices
Why did economists invent the term stagflation to describe the economic problems in the united States during the 1970s?
to describe a situation caused by a weak economy and rising prices
Why did economist invent the term stagflation to describe the economic problems in the US during the 1970s?
to describe a situation caused by a weak economy and rising prices
Why did economics invent the term stagflation to describe the economic problems in the US during the 1970s?
to describe a situation caused by a weak economy and rising prices
Why did economist invent the term stagflation to describe the economic problems in the United States during the 1970s?
to describe a situation caused by a weak economy and rising prices
What is stagflation means?
Stagflation is when the domestic economy of a country fails to grow but prices rise anyway. ("stagnation" with "inflation") DefinitionInflation & Deflation are two major vices of capitalistic economy. In inflation too much money chasing too few goods, whereas, in deflation too much over production is observed. The term Stagflation refers to the situation where the prices & level of unemployment increase continuously and the result is very slow economic growth. Definition: Stagflation is an economic situation where there is a coupling of sluggish economic growth, high inflation rate and often unemployment.In Economic terms:Stagflation = Stagnation + Inflation Stagflation describes the combination of slow economic growth and high rate of unemployment along with continues rise in prices. Stagflation occurs when the economy isn't growing but prices are. There is no consensus on reasons for stagflation. Few economists believe that it is excessive government regulation leads to it while some others feel high commodity prices leads to it. Irrespective of the cause, stagflation is extremely hard to correct due to its contradictory nature and hard to ride out. Stagflation has most swear effects on consumers as goods and services become expensive and unemployment robs them of income. To add to their misery procuring loans maybe difficult as the Central Bank may restrict credit to combat stagflation. According to Barron: "STAGFLATION term was coined by economists in the 1970s to describe the unprecedented combination of slow economic growth and high unemployment (stagnation) with rising prices (inflation). The principal factor was the four-fold: 1) raise in General Price Level 2) Increase in Unemployment Level 3) Fall in Domestic Gross Production 4) Poor Economic Growth In the situation of Stagflation the continuous raise in price level is observed. Consumer faces burden & the producers earns extraordinary profits. They respond by enhancing their products to earn the maximum profits. Interest rate has raised in such situation hence the fiscal and monetary policies aimed at stimulating the economy and only exacerbated the inflationary effects. Hence the situation has created a hard dilemma for the central banks. They attempt to head off inflation or address slowing the growth rate. The central banks usually raise the level of reserve ratio, bank rate & rate of interest etc so that the increase of prices can be checked. By: Shafaq Chohan\the combination of high inflation and high unemployment
Why don't economists agree on the same solutions to economic problems?
There are two main reasons that economists disagree when giving opinions to solve economic problems. Here are prime examples: * Economists do not come to the same conclusions when determining the validity of alternative assumptions of how the world's economy operates. With that said, their views of the sensitivity and impact of household savings to the resulting changes in the after tax return to saving; and * Economists work from different values. ( the prime example here is how an economist in the former USSR had different values than one in the United States) The two economists have different views about what policy should try to accomplish. So, they can have a fundamental differences of whether taxes should be raised for the redistribution of income.
What economic problems did Nixon face during his presidency?
President Carter faced high unemployment, high inflation, high interest rates, international "stagflation" and an oil shortage to mention a few items.
How did the war affects Americas economic situation?
It created economic problems .
