My definition of stagflation

Is when Unemployment is 5% or more and when Inflation is 5% or more at the same time.

According to the raw data at the Misery Index site, the US experienced my definition of stagflation during the following periods:

July 1970 - February 1971 (Unemployment average 5.6%, Inflation 5.52%, 8 months)

April 1973 (Un-5.0% and Inf-5.06%, 1 month)

January 1974 - October 1976 (Un-7.24% and Inf-8.88%, 34 months)

January 1977 - October 1982 (Un-7.14% and Inf-9.38%, 70 months)

April 1989 - June 1989 (Un-5.23% and Inf-5.22%, 3 months)

January 1990 - March 1990 (Un-5.3% and Inf-5.23%, 3 months)

August 1990 - February 1992 (Un-6.14% and Inf-5.92%, 19 months)

June 2008 - July 2008 (Un-5.6% and Inf-5.31%, 2 months so far)

1 comment:

Mike Liveright said...

Thanks for posting the raw numbers.

They indicate to me that this period is definable stagflation, but to me it appears that ther were 2 1/2 LONG-DEEP such periods and that until this one lengthens and deepens it is only marginally a staflation, still QUITE different from the longer and deeper ones.

The other set of figures I'd be interested in would be what periods are close. If you had defined staglation as, say, 4.7% Unimployment and 4.7% inflation, then how many more periods would have been light almost staflation.

The basis for this comment is that it seems that a definition is better if it represents a "natural" class, and it appears to me that the one given here, rather than, say 6%-unimp and (almost) 6%-inf, draw the line less "naturally" and more arbitarlly. So let's see if this period is a marginal stagflation or slips into a long-deep, un-questionable staflation.