If you follow news reports and media headlines, you might be hearing the term "stagflation" thrown around a lot lately. But what exactly does it mean, and is the U.S. economy currently experiencing, or headed toward, stagflation?
According to Leslie Preston, Senior Economist at TD, stagflation is a combination of stagnation and inflation. The term was originally coined in the United Kingdom to refer to a period of high inflation and high unemployment – but it isn't necessarily a precise term with a strict definition.
"We are hearing the term used today because there's worry that the economy may be headed in this direction, but the current state of the economy does not fit the definition,” Preston said.
In this video, Preston discusses stagflation, including whether it accurately describes the current economy and whether the risk of a recession fits within it.