Are we at risk of Stagflation or even, shock horror, Hyperinflation?

Healthy, growing economies will always experience slight fluctuations in inflation.

Inflation, as we discussed in a previous post, is an economic condition where there is a sustained rise in the prices of products and services (or, in some cases, the sustained fall in the value of currency). 

But while controlled inflation is a product of economic growth, inflation can be treacherous when taken to extremes.

In this post, we’ll discuss two dangerous types of inflation: stagflation and hyperinflation.

Stagflation 

Stagflation occurs when there is a sustained period of high inflation combined with high unemployment and no economic growth. A seemingly contradictory condition, stagflation is characterized by a simultaneous rise in prices and a decline in economic output. Stagflation rarely occurs in a normal market economy, as a slow economy typically reduces consumer demand, driving prices down.

If you look at the components of Stagflation below, it doesn't seem like...

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