The Sluggish ’70s
The main concern of people who recall or study the 1970s is that we may see something of a replay of that decade in the 2010s. Few people expect a direct repeat, because the U.S. and global economies and financial systems have changed markedly. Yet the overall impact may come to resemble that of the 1970s in degree if not in kind, and stag flation remains a possibility, for reasons explained in this section.
Stagflation describes an economy characterized by stagnant growth in GDP and by inflation. Standard economic theory says this should not occur because in a slow growth or no-growth economy demand should not ...