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Stagflation is an economics term used to describe the situation when you have a stagnant economy (no job growth) but high unemployment and high inflation. This is usually caused by an increase in the total labor force. There is just too many people in the workforce and not enough jobs available.
a period of high inflation and slow economic growth
There does not have to be any correlation between the two. High inflation, on the other hand, will decrease purchasing power if salaries don't go up as much as the inflation.
1970s
There are many disadvantages with high GDP growth. Businesses can have high Debts from banks that results into market break down. You can also have high inflation, which is caused by the every changes in growth.
The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible. When an economy experiences stagnant growth and high inflation at the same time it is referred to as stagflation.
Even though its been a quite a while since you posted this question but I would say that the government might be worried about a high rate of inflation because it can lead to increased market interest rates, making government borrowing more expensive. High relative inflation can also lead to a worsening of international competitiveness causing a fall in exports which can then threaten jobs and forecast GDP growth. Additionally, high inflation can cause GDP growth to slowdown – leading to lower tax revenues & increased borrowing. Hope this helped:)
Higher rates of inflation, decrease in business productivity, high unemployment
Too much inflation will ruin the economy but small levels of inflation will spur growth. Inflation is very harmful to any economy because it can ruin the economy's development and growth and this is not suppose to be. Inflation is also very harmful to any economy because the people living in that economy might not survive the situation and this is when you see that an economy is affected and if nothing is done to it, it can cause an economy to collapse.
Inflation is certainly not always bad for economy, in fact a moderate level of inflation matching to it's growth rate is good for the country. Moderate inflation suggest demand in the system while no inflation or deflation suggest demand collapse which is much more dangerous than Inflation. For Instance US inflation is 1.5 to 2% while it's growth is 2-3%. This equation is ok. A Country having an inflation equal to it's growth rate is not bad though it is always preffered to have lower inflation and high growth rate. But it is difficult to achieve on a continuous basis. Reserve banks all over the world prefer and try hard to have moderate inflation and would worry if there is a situation of deflation. But too high inflation will make the currency of the country very weak against the major global currencies and will bring the economy to it's knees, like what happened in case of Zimbabwe.
Inflation and Unemployment was high! :)
Inflation, which is the rise in prices of goods and services within a country, could cause a deficit, or at least an imbalance (depending on the length of the higher inflation time period) in the current account.