Posted AT 12:35 AM EDT on 27/02/08
Worry about the S-word: Stagflation is more likely to bite than recession
The latest U.S. inflation numbers and the expectation of another interest rate cut by the Federal Reserve Board make "stagflation" — not recession — the real challenge facing the U.S. economy.
The focus on recession by many economists and by the media has distracted us from the serious medium-term risk of U.S. stagflation, which combines strong inflationary pressures with stagnant economic growth — as happened during the late 1970s and early 1980s. True, the U.S.
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