stagflation

in the years after the "second world war"the economic development in most of the countries of the world became very rapid. the industrial countries developed and improved their economy even more. but after the year 1973, almost all the industrial countries economy had to face new type of economic crisis. the inflation rate of such countries became very high. this resulted recession in the economic development of such countries . as a result, industrial recession started in these countries and unemployment increased. so, comprehensive price increase in the economy in the state of recession and stagnation in known as stagflation or slumplflation. in stagflation slump and stagnation occur together. the mixed from of slump and inflation in the slumpflation.

the state of stagflation is the mixed form of normal unemployment and inflation. in such situation, inflation and recession both occur at once in the economy. despite the increase in price level and wage rate people will have hard time getting employment. goods produced in the economy will remain unsold. stagflation and inflationary recession are looked upon as one. so. stagflation is such concept in which both inflation and normal unemployment state occur at once.