Talk:Stagflation

The essence of the meaning of Stagflation includes "dilemma"

Lost, gone, not there -- it's as if the Fed has edited this article to cover up the abuse of the value of the dollar it now perpetrates.ExecTaxes (talk) 21:19, 15 February 2008 (UTC)

I'm not sure what you mean. Where do you think a point like that should go, and is it compatible with NPOV? --Rinconsoleao (talk) 22:10, 16 February 2008 (UTC)

Let's take a look at the history of this article as illustrated by all the edits since early January, with some key themes and changes drawn from the history and shown below. Helplessness, the actual fact and true essence of the word dilemma once were mentioned here at the top of the article. Now, lost, gone. Check out Webster's online, the definition of "dilemma", which follows. Note 2.a. That is what has been muffled to the point of obscurity. NPOV? I think Webster's has NPOV.ExecTaxes (talk) 20:46, 18 February 2008 (UTC)

Main Entry: di·lem·ma Function: noun 1 : an argument presenting two or more equally conclusive alternatives against an opponent 2 a : a usually undesirable or unpleasant choice <faces this dilemma: raise interest rates and slow the economy or lower them and risk serious inflation> b : a situation involving such a choice <here am I brought to a very pretty dilemma; I must commit murder or commit matrimony -- George Farquhar> ; broadly : PREDICAMENT <lords and bailiffs were in a terrible dilemma -- G. M. Trevelyan> 3 a : a problem involving a difficult choice <the dilemma of "liberty versus order" -- J. M. Burns> b : a difficult or persistent problem <unemployment ... the great central dilemma of our advancing technology -- August Heckscher> - dil·em·mat·ic/"di-l&-'ma-tik also -"dī-/ adjective usage Although some commentators insist that dilemma be restricted to instances in which the alternatives to be chosen are equally unsatisfactory, their concern is misplaced; the unsatisfactoriness of the options is usually a matter of how the author presents them. What is distressing or painful about a dilemma is having to make a choice one does not want to make. The use of such adjectives as terrible, painful, and irreconcilable suggests that dilemma is losing some of its unpleasant force. There also seems to be a tendency especially in sense 3b toward applying the word to less weighty problems <solved their goaltending dilemma -- Pat Calabria>.

11 February 2008 Rinconsoleao (Talk | contribs) (45,167 bytes) (WHY governments make mistakes is not really so relevant for the first section of this article. Could be explained further below (in neoclassical section?))

6 February 2008 Rinconsoleao (Talk | contribs) (45,497 bytes) (There are many possible reasons for government policy errors. Listing them all in that sentence is unnecessary, especially since an additional reason is given in last sentence of paragraph.)

5 February 2008 ExecTaxes (Talk | contribs) (45,559 bytes) (An essential element was removed by a recent edit. It is restored.ExecTaxes (talk) 18:29, 18 February 2008 (UTC))

2 February 2008 ExecTaxes (Talk | contribs) (45,405 bytes) (Clearly a glitch, for central banks would never central banks "use excessively stimulative monetary policy" to fight inflation.ExecTaxes (talk))

25 January 2008 Rinconsoleao (Talk | contribs) (40,985 bytes) (/* Neo-classical views on stagflationAndrew Abel and Ben Bernanke (1995), Macroeconomics, 2nd ed., Chap. 11, 'Classical Business Cycle Analysis: Market-Clearing Macroeconomics'. Addison-Wesley, ISBN 0

24 January 2008 ExecTaxes (Talk | contribs) (35,176 bytes) (Essential element of the factor of "dilemma" reincluded.ExecTaxes (talk) 18:29, 18 February 2008 (UTC))

23 January 2008 Xavexgoem (Talk | contribs) (33,175 bytes) (flagged dilemma as OR (it's slightly apocalyptic). Although it's mostly true I'm sure, it needs to be cited and placed elsewhere (otherwise article reads what-it-is, run-for-the-hills, how-it-works))

21 January 2008 ExecTaxes (Talk | contribs) (30,210 bytes) (Someone recently removed the essence of the definition of stagflation. This is inexcusable. Would those who suddenly found interest in stagflation kindly remember that the LAYMAN who uses Wiki.ExecTaxes (talk))

21 January 2008 ExecTaxes (Talk | contribs) m (29,179 bytes) (A "springboard effect" results when there's no more tinkering that will help -- in a world that depends on tinkering to get by.ExecTaxes (talk) 18:29, 18 February 2008 (UTC))

17 December 2007 ExecTaxes (Talk | contribs) (19,833 bytes) (The key to understanding stagflation is that the presence of both inflation and economic decline are obvious. Without this point made crisply, the meaning of this section would be dilutedExecTaxes (talk) 18:29, 18 February 2008 (UTC))ExecTaxes (talk) 20:46, 18 February 2008 (UTC)

This existed at the top on Decmeber 17, 2007:

Stagflation becomes a dilemma for monetary policy when policies usually used to increase economic growth will further increase runaway inflation while policies used to fight inflation will further the decline of an already-declining economy

Stagflation only becomes a problem when the marginal impact of the further use of the principal monetary policy tool available to assist central bank direction of the domestic economy does more marginal harm than marginal good, if used. Ultimately the central bank can either stimulate the economy or attempt to rein it in through the mechanism of adjusting the domestic interest rate, its primary tool. A choice can be implemented which tends to improve growth but does it ignite systemic inflation? A choice can be implemented which tends to fight inflation but how badly does it impinge growth? During periods properly described as stagflation both problems co-exist. In modern times it will be only after the central bank has used all possible tools to meet both goals, using the best quantitative measures it has at its disposal, for stagflation to occur. Major economic conditions of unusual proportion will have already created near-crises on both fronts before staglation can set in again. Stagflation is the name of the dilemma which exists wherein the central bank has rendered itself powerless to fix either inflation or stagnation.

ExecTaxes (talk) 20:46, 18 February 2008 (UTC)

Several days have passed. The two preceeding paragraphs appear to belong at the top of this article. Comments?ExecTaxes (talk) 15:00, 20 February 2008 (UTC)

The article has a note which opens with.....( but it never closes with the....) How can anyone believe such writing. —Preceding unsigned comment added by 196.41.124.8 (talk) 15:21, 9 July 2008 (UTC)

US Bias?

Since this term was coined in the UK and can be used in reference to any free market economy, why is the article so heavily biased to the US, particularly in the introduction? How about removing all those references to 'The Fed' and replacing them with non-county specific terms like 'a central bank'? —Preceding unsigned comment added by 82.20.31.4 (talk) 17:48, 8 January 2008 (UTC)

The actions of the U.S. Federal Reserve are clearly at cause and leading the global eceonomy into stagflation. The article appropriately focuses on the U.S. because the U.S. can without a doubt be seen as the policy maker whose choices impact the global economy most in this matter. It is appropriate.ExecTaxes (talk) 21:55, 16 January 2008 (UTC)

FURTHER ON THIS POINT: One need do no more than note the collapse of European, Eastern and South American stock markets of the day of the U.S.'s Martin Luther King Holiday, a collapse said by all to be directly linked to the certainty of a U.S. recession despite the Bush plan to stimulate the U.S. economy. Ignoring the fact that U.S. stagflation leads to global stagnation, at best, is totally unrealistic. Economics is a science of realism.ExecTaxes (talk) 17:40, 21 January 2008 (UTC)

Moved from article

SUGGESTION TO OTHER EDITORS: (This paragraph appears redundant.ExecTaxes (talk) 00:40, 8 December 2007 (UTC))The dilemma in monetary policy is instructive. The central bank can make one of two choices, each with negative outcomes. First, the bank can choose to stimulate the economy and create jobs by increasing the money supply (typically by creating government debt through the issuance of bonds and then loaning the money to commercial banks at low interest rates), but this risks boosting the pace of inflation. The other choice is to pursue a tight monetary policy (minimal government debt, which limits the money supply and results in higher interest rates) to reduce inflation, at the risk of higher unemployment and slower output growth.

word origin

Googling on Iain MacLeod (1913-1970, MP for Enfield West, Chancellor of the Exchequer 1970 and editor of The Spectator) yielded the article title now present in the link. Sorry for any confusion caused by earlier error. The coinage of stagflation is attributed to him by the late political journalist Peter Jenkins (Mrs. Thatcher's Revolution 1988)-- Alan Peakall 14:46 Dec 3, 2002 (UTC)

I dispute the source used, as it's wishy-washy:

The term was probably used first by a British member of Parliament, Ian MacLeod, in a 1965 speech to the House of Commons.

Note: "probably"? The article gives no sources--certainly none to Peter Jenkins, who the Wikipedia article attributes to "Ian MacLeod" (not even the correct spelling of his name: "Iain"). -Eep² 13:38, 5 May 2007 (UTC)

I changed the source to a better one and noted that the coinage is not definite. In any case, its an improvement over the mistake that someone added before: attributing the word origin to Peter Beter.--Dcooper 15:46, 5 May 2007 (UTC)

Do you have a link for that "House of Commons’ Official Report (also known as Hansard), 17 November 1965, page 1,165" reference? It would be nice to be able to verify MacLeod actually said that... -Eep² 11:07, 6 May 2007 (UTC)

OK, I found some more sources but stil nothing on the official Hansard (House of Commons Daily Debates) site.

• Bloomberg columnist Caroline Baum:

The origin of the word stagflation can be traced to the late Iain Macleod, a Tory member of the British Parliament who held many ministerial posts, including Chancellor of the Exchequer.

MacLeod reportedly coined the term in a 1965 speech to the House of Commons, saying ``We now have the worst of both worlds - - not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation.

• Monetary policy and stagflation in the UK (Google HTML cached version), Edward Nelson and Kalin Nikolov, Bank of England employees:

On 17 November 1965, Iain Macleod, the spokesman on economic issues for the United Kingdom’s Conservative Party, spoke in the House of Commons on the state of the UK economy:

‘We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of “stagflation” situation. And history, in modern terms, is indeed being made.’ (17 November 1965, page 1,165).(1)

With these words, Macleod coined the term ‘stagflation’.(2)

(1) Many of the statements quoted in this paper are those by UK policy-makers in Parliament, as given in the House of Commons’ Official Report (also known as Hansard). These quotations are indicated by the date of the speech and the page from the Hansard volume from which the quotation is taken.

(2) Macleod used the term again in a speech to Parliament on 7 July 1970 and confirmed that he had invented the word. From then on, the term was common parlance in UK economic policy debate, being used, for example, in an article in The Economist of 15 August 1970. Some sources (eg Hall and Taylor (1997)) attribute the term to Paul Samuelson (1975). But the earliest occasion on which we have found Samuelson used the word was in a Newsweek column of 19 March 1973, entitled ‘What’s Wrong?’, reprinted in Samuelson (1973, pages 178–80).

OK, I think this is the correct document but it's not available online so I have to request it, which I did. Hopefully it's free and will be emailed to me (or made accessible online for all to view). -Eep² 12:44, 6 May 2007 (UTC)

administration

Shouldn't that be under the Carter Administration, not Nixon? The combination of rising prices, persistent unemployment, and a stagnant economy had by 1977, when Carter took office, been dubbed "stagflation." The Carter administration sought to slow inflation by raising interest rates and restraining federal spending.

I second that. The 1979 crises was a double wopper! stagflation was under all four years of the carter administration. Also, there was stagflation under harry truman, from 1946-1948.

This article is a little anachronistic and blury.

It was also very bad in Canada at the time, I think that's worth mentioning. The Fwanksta 23:03, 14 October 2007 (UTC)

Nixon's Phase I Price Controls, a 90-day price freeze, were in 1972.

Phase's II, III-A, III-B and IV (Decontrol) covered 1972-1974.

Watergate so dominated the news in the second Nixon Administration that stagflation was not a top "news" item until Ford took office. After consulting the country's top economists who came to Washington for an economic symposium, Ford understood that during stagflation anything the government did would only make things worse, hence Ford brought the leaders of that symposium for a White Houe press briefing, during which time he unveiled the "WIN" button, an acronym for "Whip Inflation Now." Stagflation had tied his hands he had realized, and any act which interfered with business decision making would slow down the recovery. Thus he chose the "WIN" button to represent the consensus of this country's top economists that changes in either monetary or fiscal policy would create more problems than they cured.

The mesage from those economists was that the Nixon impeachment prospect coming on top of the oil price rise of a few years earlier had left the economy stagnant at a time when wages and prices had just been "decontroled" less than a year before.

ExecTaxes (talk) 17:46, 17 November 2007 (UTC)

Reorganize?

This article seems to be projecting stagflation's return quite a bit. Perhaps the data can be split into two sections: What is Stagflation, and Economic Outlook of Stagflation. This will allow readers unfamiliar with the subject a clear area to learn about the understood origins, causes, and effects of stagflation. The latter will educate interested readers on the outlook of this topic.

Except that Carter was not elected until 1978, sworn in Jan 20th 1979, so anything prior to that was Ford.

Hello!!! Carter was elected in 1976 and took office on Jan 20th 1977.Mulp 04:14, 16 October 2007 (UTC)

Here's a suggestion for reorganization. I can't do it myself because I'm not familiar enough with this subject. First, shorten the summary at the top to be just a short, one paragraph summary. Then follow with something like the following topics - Origin of Term, History of Stagflation in the US, Problems Stagflation Presents for Classical Keynesian Economics, Monetarist Explanation of Stagflation, Monetarist Prescription for Curing and Preventing Stagflation, Neo-Keynesian Explanation of Stagflation, Neo-Keynesian Prescription for Curing and Preventing Stagflation. I would very much like to see the history of the 1970's-80's US stagflation described in more detail, strictly from a factual point of view, including factors that may or may not have initiated it, effects, and actions that may or may not have ended it. Then I would like the Monetarist case and the Neo-Keynesian cases presented separately. I think the theories should be discussed in the context of the one major episode of stagflation that we've had. What else makes sense? JamieNettles 23:29, 8 April 2007 (UTC)

Recent events (most particularly the assessment revealed in the rate-reduction rationale set forth in the most recent communique from the Federal Open Market Committee as it moved the "Fed" to a neutral stance with regard to the dichotomy of the dilemma of recession v. inflation regarding stagflation -- despite the obviously distressed situation within the U.S. economy,) seem sufficient to demonstrate that Stagflation exists right now.

ExecTaxes 00:18, 2 November 2007 (UTC)

The January revisions from all those brilliant minds who have begun to contribute have brought this article to a high level of coherence.ExecTaxes (talk) 18:00, 24 January 2008 (UTC)

Did a reorganization of the speculations about a f. stagflation in the US. FORMAT LAYOUT OF TITLE: [Inflation|Recession|Stagnation] - Factor, so one can see the paramenters writers are concerned about.Comments for Me Happy to see you continue with it. Would love to see more information about Fan Gang. Maybe one can write an article about this person. We cite Bernanke many time but never the Chinese side... (weak point)

Yes, reorganize a bit

Added the tax void. The whole on stagflation can be reorganized indeed.

Colignatus 03:15, 1 March 2006 (UTC)

Stagflation in the United States was a late 70's, early 80's phenomena. This could be attributed to the loose policies of Nixon, Ford, and Carter, combined with high oil prices. It should be noted that in the US, at least, Stagflation was combined with a large drop in productivity, one theory of this drop in productivity was the combined entrance of large numbers of relatively unskilled women and young baby boomers into the job market, who in previous generations were not present in the labor market. The cure to Stagflation was Reagan's appointment of Paul Volcker as the Chairmen of the Federal Reserve, who responded with a painful but necessary tight monetary policy.

Jimmy Carter appointed Paul Volcker as the Chairmen of the Federal Reserve in 1979. —Preceding unsigned comment added by Russ Anderson (talk • contribs) 22:38, 15 December 2007 (UTC)

It is important to bear in mind that stagflation creeps in rather than being announced. If indeed a current round of stagflation has begun to hold its grip on the U.S. economy, Fed Chairman Bernake will likely get full blame due to the two rounds of rate reductions he made in September and October 2007. Others who understand Washington and recall the great warning that former Fed Chairman Greenspan gave to him, a warning mentioned prominantly in his book released during the same period -- the warning that Congress was on the watch and fully prepared to take away the Fed's autonomy -- will argue otherwise

ExecTaxes (talk) 17:57, 17 November 2007 (UTC)

the end of stagflation

Stagflation ended during the new age of technology in the 1990s. This caused an increase in supply. The supply curve shifted to the right faster than the demand curve. There was greater GNP (less unemployment) and lower prices, which is the exact opposite of stagflation where the supply curve shifts leftward and inflation and stagnation occur. The policies of monetary restraint by Paul Volker was not the answer to stagflation. The decrease in demand lowered prices but caused more unemployment. When both the President and the Federal Reserve shifted policies to increase the money supply, this caused less unemployment but higher prices. Neither policy was satisfactory. And stagflation is never dead and can occur again. 69.141.240.64 06:25, 7 December 2006 (UTC)

Paul Volcker successfully targeted "inflationary expectations" and held rates high long enough to be able to see a round of labor contract renewals at moderate increases, which confirmed that inflationary expectations had subsided, at which point he lowered rates. Ronald Reagan adapted willingly and initiated policies in support of Paul Volcker's plan.

ExecTaxes (talk) 18:06, 17 November 2007 (UTC)

Asset Class Example

The reason I undid the asset classes example is that housing costs are part of the Consumer Price Index. So falling home prices are factored into the CPI. That fact that the CPI is increasing despite falling home prices is the inflation part of stagflation. - Russ Anderson (talk) 02:47, 31 December 2007 (UTC)

Cleaning up

I hope no one minds. I'm fact-templating the area and rewriting a bit. This thing needs citations like insert-extremely-relevant-analogy/simile ;) Xavexgoem (talk) 20:30, 23 January 2008 (UTC)

You are right this article is a mess. Probably the best way of improving it would be to start with the historical context in which the term arose. Stagflation came as a huge surprise in the 1970s to Keynesian economists accustomed to a stable Phillips curve relationship who used models mostly based on demand shocks rather than supply shocks. When they suddenly faced supply shocks (oil shortages) in the 1970s, their usual policy prescription (greater inflation to reduce unemployment) simply fed into higher inflation, and eventually the Phillips curve shifted. This is standard undergraduate economics today so it should not be hard to reference an article like this. --Rinconsoleao (talk) 09:06, 24 January 2008 (UTC)

I re-re-wrote the lead as per WP:MOS; I don't think I removed too much from the intermediate revisions, and did my best to reintroduce them. I think the next thing to work on are briefer summaries of the theories, but I'm no economist. Xavexgoem (talk) 23:39, 24 January 2008 (UTC)

List of junk theories

There is a whole list of theories offered on the page. Almost all are explained without citations. Many are far from being mainstream views. This article needs to start with the mainstream view of stagflation and could then have a short section on alternative theories. --Rinconsoleao (talk) 15:56, 24 January 2008 (UTC)

Formatting

Please follow the Wikipedia style for the capitalization of headings. Wikipedia uses "sentence case" for headings, and not "title case", that means that only the first letter of the first word and the first letter of proper nouns are capitalized, not the first letter of every major word. Propoer nouns are generally the names of people, places or organizations. Please see WP:HEAD. Thank you. Ground Zero | t 00:06, 31 January 2008 (UTC)

Differential accumulation is not one of today's main stagflation theories

To much space in this article is taken up by a theory called differential accumulation. Checking that link demonstrates that the theory is mostly promoted by two political science professors (Bichler and Nitzan) at York University in Toronto, who have done some writing about stagflation, but it's by no means central to their research agenda. See also their chronological archive. Since these links make clear that this is the point of view of a small number of people, I will delete the claims in the introduction that this is one of the 'three main theories' of stagflation today. Including a discussion of 'differential accumulation' in this page is an excellent idea, but it should also be shortened, as the current article greatly exaggerates the impact of this alternative theory. --Rinconsoleao (talk) 10:42, 31 January 2008 (UTC)

With all due respect, Rinconsoleao, you are misled. Stagflation is an integral part of the differential accumulation theory. The two main political economy regimes or capitalist strategies in the theory are mergers/acquisitions and stagflation. If you had read the article it would have been apparent to you. Just look at the title of the link: "Regimes of Differential Accumulation: Mergers, Stagflation and the Logic of Globalization". A google search shows that "stagflation" appears 195 times within their website, almost as much as "accumulation" or "capital" at about 300. I will agree that it isn't a "main" theory since it isn't widely held, but it is unique and has appeared in peer-reviewed journals. Currently the article states it as an alternative theory of stagflation, which is accurate. It deserves to be here because stagflation is something that mainstream theories have an uneasy time explaining. Neoclassical economics, in particular, wouldn't predict stagflation by using first principles. Nubeli (talk) 16:35, 29 January 2009 (UTC)

Iain Macleod

I have slightly changed the lead section about Macleod (sic - see his article and this Conservative Party PDF) because I think it was misleading as it stood. Here is what the relevant sentence said:

The term stagflation is generally attributed to United Kingdom Chancellor of the Exchequer Iain MacLeod, who coined the term in a speech to Parliament in 1965.

The misspelling of his name is a minor matter, but the description of his job is extremely misleading. In 1965 there was a Labour government under Harold Wilson, and so Macleod held no government post at all at the time. His term as Chancellor was still five years in the future, and indeed was extremely short: he died just one month after the Conservatives' 1970 election victory. The previous wording made it look as though Macleod's coining of the term "stagflation" was related to his Chancellorship. As that is quite wrong, I have changed the wording. Loganberry (Talk) 21:15, 28 February 2008 (UTC)

Nixon's Wage and Price Controls preceded the 1973 Oil Price Shock

Richard Nixon announced wage and price controls on August 15, 1971. The first oil price shock started in October 1973. Nixon did not implement Wage and Price Controls "in response to" an oil price increase that did not occur until two years later.

For further information see "A Monetary Explanation of the Great Stagflation of the 1970s", http://fordschool.umich.edu/rsie/workingpapers/Papers451-475/r452.pdf —Preceding unsigned comment added by Russ Anderson (talk • contribs) 13:44, 28 May 2008 (UTC)

Definitions from prominent textbooks

Glossary of Burda and Wyplosz, Macroeconomics: A European Text, 2nd ed., 1997:

Stagflation: periods when both inflation and unemployment increase.

Glossary of Barro, Macroeconomics, 5th ed., 1997:

Stagflation: a situation in which a recession is accompanied by high and rising inflation.

Glossary of Blanchard, Macroeconomics, 2nd ed., 1004:

Stagflation: the combination of stagnation and inflation.

--Rinconsoleao (talk) 12:45, 16 July 2008 (UTC)

Keynesian and Monetarist Views Section a little long?

Hey all,

I've been following this page for the past bit since it got mentioned on wikiproject economics as something we needed to clean up, but I hadn't gotten a chance to participate much in the recent changes. I think there are a good number of things on the page that need cleaning up, one in particular being the early Keynesian section. It's mostly a direct copy from The Economic Consequences of the Peace and I think because it's overly in depth, it ends up being out of proportion with its actual importance to the topic. Would anyone have any thoughts or objections if I greatly trimmed that section? Vickser (talk) 23:24, 22 July 2008 (UTC)

Just to expand, the way the article is set up it seems to be crediting Keynes with explaining stagflation, when that is very much not the case. I was looking for how to say this since my basic source for my instinctual issues was "But in every macro class I ever took, one of the resounding sentiments was 'Keynes said you couldn't have inflation and a recession at the same time, and people believed it, and then there was the 1970s.'" I dragged out a few books, and essentially I think what we want from the Keynes bit is to set up the sentiment "Keynesian economic models failed to account for the possibility that unemployment and inflation could climb in tandem. This phenomenon, which came to be called stagflation, put policymakers at a loss. The forecasting tools that had made government economists seem so prescient a decade before were in reality not good enough to let the government fine-tune the economy." (The Age of Turbulence. Alan Greenspan. PP. 60-61.) Vickser (talk) 23:45, 22 July 2008 (UTC)

I completely agree with your summary of the way the debate is presented in textbooks, and it's more or less accurate. But one complication is that Keynes himself (as opposed to his followers) presented a clearly classical explanation of stagflation in the aftermath of WWI, based on excessive printing of money coupled with the government mucking up the real economy.

Therefore I just tried to clarify things a bit. I renamed the section that was "Early Keynesian and monetarism" as "Postwar Keynesian and monetarism". That is where the idea that 'Keynes said you couldn't have inflation and a recession at the same time, and people believed it, and then there was the 1970s' belongs. I moved Keynes' own comments from 1919 down to the neoclassical section.

That makes the discussion more coherent with the two theories of stagflation (New Keynesian and New Classical) that are discussed in the introduction. But I agree that the discussion is much too long, and still hard to understand. It would be particularly helpful to combine the section called "Neo-Keynesianism" with the section called "Supply shock theory", because they are the same thing. Describing the same thing twice with different words will only confuse people. --Rinconsoleao (talk) 07:19, 23 July 2008 (UTC)

Nice Greenspan quote by the way. Could be useful. --Rinconsoleao (talk) 08:11, 23 July 2008 (UTC)

I think just moving it helped a lot. I'm going to try rewriting a bit to see what I can smooth out. I also went ahead and removed the plain language example that was in there that someone else had tagged as OR. It seemed confusing, OR, and really just not something that we'll want in the article. We should seek to explain it so we don't need a plain language example. Vickser (talk) 20:52, 23 July 2008 (UTC)

Great! --Rinconsoleao (talk) 06:59, 24 July 2008 (UTC)

I'm also going to move a little bit of the subsection called 'quantity theories' into the 'neo-classical views' section. The 'quantity theories' section is not needed because it is the same thing. --Rinconsoleao (talk) 07:47, 24 July 2008 (UTC)

First sentence wording

I noticed that ExecTaxes removed "for a period of time" from the first sentence. While I'm not in love with the wording of the first sentence with or without those exact words, I think we're better including it until we can write a better sentence. What's exceptional about stagflation is that it's sustained, something that had previously not been thought possible due to the phillips curve. While I'm not home right now and thus can't pull out econ textbooks, online sources seem to go with that. Newsweek, for example, says stagflation is "the simultaneous occurrence of high inflation, high unemployment and slow economic growth; but its defining feature was the persistence of this poisonous combination over long periods of time." [1]. I'm going to go ahead and add for a period of time back in, but we should probably hash out a consensus here. Vickser (talk) 17:20, 25 July 2008 (UTC)

Hi, Vickser.

While I agree thoroughly that "sustained" is at the essence of the matter, by my logic, "remaining unchecked" is the essence of "sustained" while the phrase "period of time" dilutes the meaning to days, hours, minutes, weeks, months, what? They are all "periods of time" but "unchecked" is unchecked. No matter.

Hence, no big objection from ExecTaxes. Frankly, I prefer "economic condition" since stagflation is truly like a medicial condition and ultimately must be treated as such in order to be cured.

Obviously, these days the U.S. side is not treating stagflation like a medical condirtion, but that's not a subject for the article that I care to touch.ExecTaxes (talk) 17:50, 25 July 2008 (UTC)

Coming back to review this article over one year later I feel that "significant" should preceed "period of time". ExecTaxes (talk) 23:18, 3 October 2009 (UTC)

Notability

Okay I agree that this topic is very notable. However, I don't agree that we need to assert its notability in the actual article. To avoid an edit war, we should discuss here. Zain Ebrahim (talk) 14:20, 4 August 2008 (UTC)

I think that, at the very least, the text asserting notability needs to be copyedited and improved. It's got some good information, but the tone and the flow is off, especially for the first sentence. -FrankTobia (talk) 15:21, 4 August 2008 (UTC)

"Notable" was in that sentence when I first encountered it, and frankly, whatever term or terms lead that sentence, the content speaks to the essence of stagflation. The "mutually exclusive" that someone contributed, refering to post-war economic theory, soars. The fact that speading fixed costs over fewer units of production raises unit cost, thereby causing an inflationary spiral, speaks to the essence of stagflation. Hence I have sought to retain the sentence.

Would either of you care to comment of whether stagflation is an "economic situation" or an "economic condition"?

The logic which goes with "economic condition" is that, like a heart condition, if not "treated", in and of itself it further impairs the health of the economy. If "treated", however, the economy recovers.

"Economic situation" seems to say that the situation implies no deleterious consequences.

Stagflation is considered an economic condition partly because, in postwar macroeconomic theory, inflation and recession were regarded as being mutually exclusive and more significantly because an inflationary spiral results as contraction further boosts unit cost and adds to inflation.

ExecTaxes (talk) 12:15, 6 August 2008 (UTC)

Economic condition sounds better but without solid definitions and/or reliable sources, we (technically speaking) should go with neither. However, I think that economic and condition are fairly self explanatory so the sentence looks good as you proposed above. I think we should use that. Zain Ebrahim (talk) 13:48, 6 August 2008 (UTC)

While "economic condition" is currently a listed condition in Disambiguation I hesitate to make the change until Rinconsoleao comments one way or the other in respect his obvious keen interest and deep knowledge within the field of economics. Or at least wait a week or ten days. Thanks for your comment. Further, I don't want it to appear that I am using this as an opportunity to include a phrase which has been rejected recently by others, since really, the matter we are discussing is neither the meat not the potatoes of stagflation. It is merely phraseology, important but not of the essence of the matter.ExecTaxes (talk) 19:14, 6 August 2008 (UTC)

'Economic condition' is occasionally, informally, used to mean 'economic problem'. But more frequently 'condition' and 'economic condition' are just synonyms for 'situation' or 'economic situation'. In other words, there is usually no negative implication associated with the word 'condition' when it is used in economics (I suppose there is a negative implication when 'condition' is used in medicine, but that is a different issue). Also, there is no sense in which 'economic condition' is a technical term (and it certainly does not deserve an encyclopedia article of its own). If it is used in the stagflation article, it should be understood that no negative connotation is implied. I don't mean to say that stagflation is good, just that calling it a 'condition' is not a way of saying it is bad. --Rinconsoleao (talk) 07:03, 7 August 2008 (UTC)

By the way, I just deleted the reference to economics on the disambiguation page for condition. I believe it was inaccurate. --Rinconsoleao (talk) 07:06, 7 August 2008 (UTC)

Also, I'd like to say to ExecTaxes especially that I agree with most of his/her analysis and value judgments about stagflation. I've deleted some of his edits, not because I fundamentally disagreed with them, but because sometimes they included some imprecise details, or some value judgments that are usually but not universally accepted. Also, my impression is that many of his comments correctly analyze supply-shock-based stagflation, but aren't completely accurate when applied to policy-based stagflation. Finally, much of the material he wants to include is very appropriate, but needs a longer, more complete argument to back it up, and therefore needs to be included somewhere other than the introduction, so that all the supporting arguments can be included. That is, I really think that the opening sections of the stagflation article should stick to the simplest, most widely agreed material. --Rinconsoleao (talk) 07:21, 7 August 2008 (UTC)

I have just tried editing the passage in question about notability. I've tried to maintain the point I think ExecTaxes intended (namely, that stagflation is a problem that is hard to eliminate if it gets started) but I got rid of some bits I believe are partly inaccurate. First, I disagree with the claim that the second reason for notability is 'more important' than the first. Second, I have been deliberately vague about when stagflation is difficult to eradicate, because I think many economists would argue that policy-based stagflation is easy to eradicate (just get rid of the inappropriate policies) whereas supply-shock stagflation is difficult to eradicate because there is a tradeoff between the goal of lowering unemployment and the goal of lowering inflation, and moreover because increased inflationary expectations make that tradeoff worse. But saying that big mouthful is inappropriate in the introduction, therefore I propose making the comment in a vague but correct way first, leaving the detailed explanations for the theory sections later in the article. Third, I don't think there is general agreement about the precise mechanism for an inflationary spiral that was previously mentioned (fall in output --> higher unit costs --> greater inflation) because whether a fall in output leads to higher unit costs depends on whether most of the economy is characterized by increasing returns to scale or decreasing returns to scale, which is something economists disagree about. Therefore I think it is better just to say that stagflation has sometimes proved hard to stop once it gets started, and leave the precise theories about why this has proved to be true for theoretical sections later in the article. --Rinconsoleao (talk) 07:32, 7 August 2008 (UTC)

You have never responded to this and you misquote the economic argument I put before you in a manner which reaches beyond vacuous and maybe reaches beyond specious, toward disingenuous.

Fixed costs carried by fewer units of production raises unit cost in the eyes of every living economist.

Nonetheless, if you'll accept the reality that "sometimes" is a joke, I'll let go of the inflationry spiural aspect.ExecTaxes (talk) 15:44, 7 August 2008 (UTC)

I thought I did respond to it. If there are fixed costs, then (at least over some range of output) there are increasing returns to scale. So when I said economists disagree about the prevalence of increasing and decreasing returns to scale, I thought I was addressing your point. --Rinconsoleao (talk) 18:03, 7 August 2008 (UTC)

I seek to address this statement for it is naive, "many economists would argue that policy-based stagflation is easy to eradicate (just get rid of the inappropriate policies,)" for any old Washington hand can set them straight in a word. Naive. Politicians create policies. To argue that one can "just get rid of" subsidies for corn-based fuels is ridiculous, in reality. Ask Brazil. The WTO will soon get their complaint that tariffs keep their cheaper corn-based fuel out of the U.S., even as a naive economist argues that we have merely "supply-shock" staglation. Let's follow the next topic down (Cutting edge) and see how long it takes the Fed to depart from 2.0% money in a 5.0% inflation economy. It will not be easy to "just get rid of" that, even when the time comes that economists argue that they should.ExecTaxes (talk) 16:09, 8 August 2008 (UTC)

Also, I think 'invariably' is too strong. Some forms of stagflation (in particular, policy-induced stagflation) may be easy to eliminate (at least according to some economists). For example, Zimbabwe has million-percent inflation and 80% unemployment (roughly speaking-- I don't have the numbers at hand). Some economists would argue that getting rid of that situation is easy: just stop printing money, and lift price controls (which cause unemployment because nowadays in Zimbabwe anyone who tries to charge the true market price on products they sell gets beaten up by government gangs, so stores and factories are closing and firing their workers all over the country). So if we say 'invariably', we are claiming that all economists agree that all forms of stagflation are difficult to eliminate. Are you really sure that all economists agree about that? --Rinconsoleao (talk) 18:10, 7 August 2008 (UTC)

So how about 'often' or 'frequently' instead of 'invariably'? --Rinconsoleao (talk) 18:17, 7 August 2008 (UTC)

Also, I don't know what exactly 'painful' means in an economic context. How is it different from 'difficult'? Would you accept 'costly', for example? --Rinconsoleao (talk) 18:11, 7 August 2008 (UTC)

A meeting of the minds seems to have occurred. That is a good thing. I like all your suggestions here. The point is not to be inflamatory but to provide a context for all that follows. Thank you.ExecTaxes (talk) 15:36, 8 August 2008 (UTC)

Great. Thanks to you too for your efforts on this page. --Rinconsoleao (talk) 15:38, 8 August 2008 (UTC)

I have rewritten the 2 weird "this is notable" because phrases at the top of the article, removing the needless notability words. Perhaps this is the end of this discussion? Ace Frahm (talk) 01:12, 15 October 2012 (UTC)

Serious problems with the later sections

The section dealing with 2007 onwards unfortunately is out of place in Wikipedia. It is essentially an academic treatise on potential future theories of stagflation. It takes a series of recent articles, conducts some original analysis on them, and rolls this up into "prospects" for stagflation. However, since Wikipedia is a tertiary source, this is not permissible; it is the Wikipedia definition of original research (note the structural differences between that and academic original research). Then, there's the fact that from another angle it can be seen as little more than news reportage, as it quotes endless statistics from endless agencies. To be permissible in Wikipedia, the text needs to deal with what third-parties have reported regarding the views of possible stagflation as expounded by notable sources (people or organisations or etc). It cannot construct its own view, or its own case, or its own anything else to consider the 'prospects for stagflation'.

I therefore propose imminently to delete the entire section. This would be a temporary measure while the content is rewritten to be both encyclopedic and Wikipedic in policy compliance. It could be re-written gradually in-situ, or given the rather zealous writing we already have it might be better on a subpage like Talk:Stagflation/2007 redraft.

I will deal with other problematic sections of the article in due course.

I also observe that much of this talkpage is also occupied with semi-academic discussion of the situation in the world at present, and I am concerned that this being exported to the article proper. Just as the article is not for putting together ideas, the talk page is not for discussing them in general - it is only for discussing how to write the article. I recognise that many talk pages stray in this way, but in this case the degree of export into the article appears to be unacceptably high. Splash - tk 23:04, 12 August 2008 (UTC)

You act as if stagflation is something that is fully understood and about which everything is generally known. Hello! ExecTaxes (talk) 20:35, 13 August 2008 (UTC)

Err... no. The article can of course talk about what theories there are regarding stagflation, by referencing the publications such theories have been developed in. It can also talk about the bits that not understood, again by referencing sources that say they are not understood. It cannot write entire sections that attempt to understand stagflation in their own right, and which do not appear anywhere to cite third-party sources that state this understanding, or lack of it. I have removed the section in question. I'm happy to help reconstruct something that is acceptable to Wikipedia. Bear in mind that I'm not here as an economist, merely a Wikipedia who sees a very problematic article. Splash - tk 09:37, 14 August 2008 (UTC)

Ok. Point taken. You might consider the possibility that the topic of this article concerns the dilemma which leaves the entire Western world (and more) hamstrung right now. The lead topic on this talk page points out that as example defining "dilemma" itself is the essence of this crippling thing, stagflation. We who discuss wording and work out agreement in this "Talk" section must walk the fine line between sounding inflamatory or apocalyptic on the one hand and watering the subject down too much on the other. Inasmuch as you may not be aware of the fact that stagflation on a global scale threatens to bog down all of society for a decade or more, if allowed to take hold, I won't attempt to convince you. Has it taken hold yet? Now there's another matter which doesn't belong here, right? Thanks for the note. ExecTaxes (talk) 14:31, 14 August 2008 (UTC)

The 21st Century section contained unsubstantiated claims, inappropriate conclusions and ignored the possible effects of a once-in-a-lifetime drop in real estate and commodity prices. In light of the tremendous interest in the subject and fast-moving changes, I believe the section is valuable as a characterization of the thinking of early 21st century observers, but it is completely inappropriate to reach any conclusions. Therefore, I reworked it and moved it to the end, where its value will be to connect present-day readers to the issue. The "responses" section was also too heavy-handed and obviously supply-side. I think that by re-working the language I kept the facts in proper context but removed bias in style and substance. Both later sections can now be finished with informative citations. I do not believe there are any controversial or unsubstantiated claims remaining in them. --Dlawbailey (talk) 09:16, 11 September 2008 (UTC)

Use of Term to Define Term

The first sentence of the article defines stagflation in part as "economic stagflation", which wiki reference then references this article for definition. This is inappropriate and extremely confusing. [User:arteworks] —Preceding unsigned comment added by 68.203.17.37 (talk) 06:53, 23 December 2008 (UTC)

I don't think so!

Stagflation is an economic situation in which inflation and economic stagnation occur simultaneously and remain unchecked for a period of time.[1] The portmanteau "stagflation" is generally attributed to British politician Iain Macleod, who coined the term in a speech to Parliament in 1965.[2][3][4] The concept is notable partly because, in postwar macroeconomic theory, inflation and recession were regarded as mutually exclusive, and also because stagflation has generally proven to be difficult and costly to eradicate once it gets started.

I think you should read and think a bit more PRECISELY.

Editing comments on "Stagflation in the 21st Century", if yours, are spot on. However, removing the so-called "weasel words" strikes up a controversy that goes to the core of Ben Bernanke's so-called Recovery Plan.

It is not politically correct to say the full and simple truth at this point in time. ExecTaxes (talk) 22:25, 28 January 2009 (UTC)

Is this a joke?

References 12, 19 and 20 list Macroeconomics as being written by Abel, Andrew; Ben Bernanke and Britney Spears —Preceding unsigned comment added by 114.183.95.81 (talk) 06:27, 20 June 2010 (UTC)

Improper Citation of Blanchard

Right now the first paragraph cites the glossary (G pg 8, or "G-8") of Blanchard's Macroeconomics (2000, 2nd) with it's explanation of stagflation and the idea that no one policy addresses both stagnation and inflation simultaneously (which is slightly controversial, according to my prof, thus I decided to check my copy of Blanchard). I am using Blanchard's Macroeconomics (2009, 5th edition, Instructor's Review Copy). All the glossary says is "Stagflation: The combination of stagnation and inflation".

After writing this talk post as a head's up, I believe I am now going to perform a minor edit of that sentence. In my edition Blanchard also provides Stagflation discussion on pages 152 and 583, according to the index... pg 152 is just the basic definition and pg 583 gives historial and "rational expectations" context. I'm going to update the citation and the last part of the first paragraph to reflect this.

Feel free to make an improvement/correction... I'm just trying to make sure I've explained my intended edit correctly as I'm not a frequent Wikipedia-editor (this is as of November 9th, 2010, 9:45am Pacific Time).

Thanks,

JDM 128.193.8.12 (talk) 17:43, 9 November 2010 (UTC)

The Section on Keynes

In the article, Keynes is quoted because he apparantly gave the best explanation of the neo-classical position. However, the quotations only address his views on destructive powers of inflation. Given that the neo-classic position (according to the article, at least) is that inflation cannot affect supply, this section either should include quotations explaining Keynes' view on the factors that caused unemployment or should choose a different champion of the school's position.

Since the two sides are seperate, was it just coincidence that the US economy suffered a supply shock while the government was pumping more liquidity into the system? If so, the line about the causes of stagnation and inflation requiring seperate explanations should probably be removed. If not, what is the connection?

Also, comments above suggest that there is a second, largely accepted view (from monetarists? Neo-Keynesians?) that appears to have been removed. I have no idea what the removed explanation is; is it worth re-adding? I would think, from even a strictly historical POV, that it would be. Thanks, guys! 174.24.103.26 (talk) 02:32, 19 February 2011 (UTC)

Section on causes

An editor inserted a tag (see [2]) saying that the section on the causes of stagflation might be 'misleading'. Such a tag needs an explanation here on the talk page. The section on causes (mostly written by me) is a summary of the explanations of stagflation offered by mainstream macroeconomics textbooks. The summary is supported by several page-specific references to the points in the textbooks where those explanations are discussed. If you think the discussion is inaccurate, please explain why, so that it can be improved. References would be appreciated. Rinconsoleao (talk) 13:21, 7 October 2011 (UTC)

Broken citation and irrelevant information

Under the section "Explaining the 1970s stagflation"- "Perhaps the most notorious factor cited at that time was the failure of the Peruvian anchovy fishery in 1972, a major source of livestock feed.[16]" I've never edited a page before and this is my first time posting in a talk, but I believe this information to be malicious and should be reported.

03:16, 26 December 2011 (UTC) — Preceding unsigned comment added by 24.185.187.158 (talk)

Our one graph is not the most common one

Or, it's not the most common I have seen in explanations of stagflation. It may even be wrong, or far more seriously :-) perhaps correctly answering the wrong question!!

The graph I have most commonly seen for classic energy-crisis driven 1970s-style stagflation shows both the demand curve and supply curve as diagonal lines which intersect somewhat in the neighborhood of a right angle. It's a very economics-textbook type of graph. And then, when there's a "supply shock" such as a jolting increase of oil prices, the supply curve moves inward and the new equilibrium point results in both higher prices and lower GDP. FriendlyRiverOtter (talk) 19:16, 7 March 2017 (UTC)

demoting economics sidebar, which shows inflation, but not stagflation

The following textbook includes the stagflation graph I'm most familiar with:

Macroeconomics: Principles and Policy, 13th edition, "Ch. 10 Bringing in the Supply Side: Unemployment and Inflation?", William J. Baumol, Alan S. Blinder, Cengage Learning, 2012, 2016.

In contrast, the sidebar for general economics on the left gave me the wrong idea, and I think it's likely to give other people the wrong idea as well. I ask, if one of the most common forms of stagflation occurs when the supply curve shifts inward, why include a graph showing an outward shift of demand curve? ? I don't think we should. And regarding the graph in the above Baumol and Blinder textbook,

(1) Does a reasonable, straight-down-the-middle reading of fair use permit us to include this graph?

(2) And/or could we find another similar graph? FriendlyRiverOtter (talk) 20:47, 12 July 2017 (UTC)

---

http://cdn.yourarticlelibrary.com/wp-content/uploads/2014/04/clip_image002566.jpg [first graph, which is about a quarter of the way down]

http://www.yourarticlelibrary.com/macro-economics/the-stagflation-and-supply-side-of-economics/38041/

This is a site somewhat similar to Wikipedia! And same question about fair use of images. FriendlyRiverOtter (talk) 20:47, 12 July 2017 (UTC)

Dilemma definition

@LightningfeatherRoger: this is the place to discuss the change you're proposing. I don't see how copying in a dictionary definition of "dilemma" adds anything useful to this article. -- Fyrael (talk) 19:26, 29 September 2021 (UTC)

Bit of a dog's breakfast

This article is a mess. I've gone through and liberally sprinkled {{citation needed}} across a lot of the content. It needs a pretty comprehensive rewrite that I am not qualified to do. Large parts are un-cited, or very poorly cited.

My feeling from reading the article is that the interesting thing about stagflation is that none of the schools seems to adequately explain it, though they have attempted to do so. More information about the phenomenon itself rather than attempts by economists to explain it would be more useful than the current patchwork attempt by fans of each school to defend their preferred theory. Essentially, a big expansion of "Causes & Effects" and a big reduction in "Economist's views".

The article would be improved if:

• there was a lot more explanation of the effect and the evidence proving it was a real thing, why it was important, the direct effects it had on people, the various approaches taken by governments and banks to correct it, and whether they succeeded
• sources are improved to more impartial secondary and tertiary sources to even out possible bias
• the various attempts by major economists to explain the phenomenon were summarised with due weight given to the more widely accepted schools, with more fringe theories and reckons either removed or hugely abbreviated

David Palmer//cloventt ^(talk) 04:07, 16 November 2024 (UTC)