Tuesday, August 28, 2007

Merriam-Webster Word of the Day: Stagflation

Merriam-Webster Dictionary

stagflation \stag-FLAY-shun\ noun
: persistent inflation combined with stagnant consumer demand and relatively high unemployment

Example sentence:
In the '70s, when the economy slid into stagflation, many college graduates had difficulty landing the high-paying jobs they had expected.

"Stagflation" is a portmanteau, that is, a word that blends two others (in this case, "stagnation" and "inflation"). The first documented use of the word appeared in 1965 in the writing of British politician Iain Macleod, who wrote, "We now have the worst of both worlds — not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation." Macleod is often credited with coining the term, and his linguistic invention was quickly embraced by economists in the United States, who used it to refer to the period of economic sluggishness and high inflation that affected the country in the 1970s.

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