The news has been consistently full of disheartening records of ‘lowest since’ and ‘highest since’ for quite a while. Unemployment is still rising if not accelerating. 12% of all homes with mortgages are either in default, delinquent, or foreclosure. Nearly every economic metric chart looks either like a moonshot or cliffdiving. The Dow Jones has now fallen farther and faster than the it did in 1929.
It’s time to stop bluffing.
photo credit: Freddy The Boy
Seems like some of the econoblogs (and non-econ blogs and other sources) that I subscribe to such as Econobrowser, the NYTimes, Paul Krugman, Population Statistic, Jon Taplin, the Wall Street Journal, and the Big Picture are talking stagflation.
stagflation [wiki]: a portmanteau of the words stagnation and inflation, is a term in macroeconomics used to describe a period of high price inflation combined with slow output growth, high unemployment, or recession.
You may recall that both I and Google Trends forecast that trend some time ago. Running the same query again gives a different picture, especially across different countries and cities (for example, Europe is Googling ‘deflation‘ while the US searches for ‘stagflation‘).
