Hi this is Tutor Nick P and this is Word Origins 308. The word origin today is stagflation.
Okay. If somebody wants a screenshot, do it right now. Let's get right to it. If someone
says stagflation, it is a situation in which there is high inflation and a stagnant economy
including stagnant growth high unemployment and a recession at the same time, it is basically a
portmanteau. Remember when we take two words we just kind of squeeze them together to form
a new word. That's a portmanteau, of stagnation and inflation. If something stagnates, it stays
the same without growing or developing. So it's no real growth. There might even be a little bit of
non-growth or sometimes if there appears to be some growth in this it's mostly just inflation.
Because in dollar value( amount) it may look like the economy is growing a little bit, but in fact it
is not because it's just all inflation. The prices are just higher. So they may actually be producing
less articles. The companies are making less profit. Even though, the dollar value (amount ) may
be higher. So it's not real growth if it's any growth at all. So if there is growth. It's usually
just the inflation that appears to be some growth, but is not real growth. Let's continue. The term
is believed to be coined and attributed to Lain Macleod, a conservative party politician
in a speech he gave in which he was speaking about the UK economy, in The House of Commons in 1965.
Here is his quote. We now have the worst of both worlds. Not just inflation on one side
or stagflation on the other, but both together. " You know, and then later on. He basically says
we have a sort of stagflation situation. So he seems to be the first one that said it. And a lot
of economists took it from his speech and this is how we got the word stagflation. Let's continue.
And we got four examples of the way you may hear it. Many economists have adopted Lain Macleod's
term stagflation to describe a sluggish economy with high inflation. Okay. Good.
Number two. Many economists claim we are experiencing stagflation right now.
In the economy. Number three. Some economists claim we won't be able to raise rates enough
without crashing the world economy to counter the stagflation. Yeah. We had stagflation in the 60's
and 70's. Finally, in the 70s we got out. We got out of it by raising rates to a really
really high number. It was double digits we raised it up to like I don't know 12, 13, 14, 15,
16 percent. if you did that to the the world economy now you'd probably crash it because
now we have so much more debt in the world. We didn't have that much debt in the world.
Every country is greatly in debt and even just raising it to three or four percent would probably
completely crash the world economy. They'll never be able to raise it to the double digits
they did in the 70s in order to to fight the inflation. That's how they beat it in the 1970's.
When we finally were able to get stagflation under control. They were raising the interest
rates really high there. A lot of economists say that that won't work this time. It can't we will
totally crash the the whole world economy. Every country's economy will go right down. If we try to
do it that way. Okay. Because the the interest rates with the amount of debt. The interest
rate people, countries won't be able to pay their debt. It's that simple. All right. Number four.
Thus, the .... the no the US economy experienced the inflation under Jimmy Carter Administration
in the 1970's. And yeah it was finally when he got out of office under the Reagan administration
that they were able to... you know, fix it. They were able to deal with it and then of
course the economy started coming back under Reagan. Okay. Anyway, I hope you
got it. I hope it was clear. I hope it was very informative. Thank you for your time. Bye-bye.