The timeframe for stagflation has never been well-defined, nor is the definition of stagflation well understood. It is more complex than being a shortfall in growth from long-term trend with inflation. It is also more than a productivity shortage.
Yet, as a google trend search topic it is currently quite popular. Most economists would suggest that it is a long-term structural issue that can last a decade; however, our only strong stagflation experience in the US was in the 1970's. Some would point to macro events in the 1940's and 1950's, but the growth and inflation numbers were not near the levels of the 1970's.
We can have short-term stagflation when there is strong inflation upside but strong downside growth risks. There can easily be divergence between growth and inflation. There is no reason that high growth and inflation always have to be positively correlated.
Of course, there can be supply shocks that contribute to slower growth, but a supply shock is not the same as a general increase in prices. Currently, the global economy is facing two supply shocks, energy and trade congestion. In that sense, we are facing growth constraints and higher prices.
The US economy is facing a supply shock through trade bottlenecks while demand is still high from loose fiscal and monetary policy; two key conditions for stagflation. It may not be a long-term situation, but it is real and can create policy and investor confusion. It is not clear policy-makers have tools for solving the supply shocks, It is not clear whether investor should react to the immediate dislocation or focus on longer-term expectations.
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