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The most recent period of stagflation occurred during the [[Jimmy Carter|Carter Administration]] in the late 1970s. Saving money becomes impossible, because the cost of living increases faster than the value of any investment return in a no growth environment.  

The most recent period of stagflation occurred during the [[Jimmy Carter|Carter Administration]] in the late 1970s. Saving money becomes impossible, because the cost of living increases faster than the value of any investment return in a no growth environment.  

And without savings, new job creation becomes impossible. People consume whatever they produce as fast as they produce it, because money becomes worthless if you hold onto it (like a game of Hot Potato, or an ice cream cone melting in your hand). This is much of the theory behind [[Keynesian economics]] and [[stimulus]] spending.

And without savings, new job creation becomes impossible. People consume whatever they produce as fast as they produce it,<ref>or "[[prodigal]]ity," as [[Adam Smith]] referred to it.</ref> because money becomes worthless if you hold onto it (like a game of Hot Potato, or an ice cream cone melting in your hand). This is much of the theory behind [[Keynesian economics]] and [[stimulus]] spending.

One sign of '''stagflation''' is when bond yields decrease while the value of gold increases, as is occurring in mid-2011.

One sign of '''stagflation''' is when bond yields decrease while the value of gold increases, as is occurring in mid-2011.

== See also ==

== See also ==

[[Category:Economics]]

[[Category:Economics]]

[[Category:Dictionary]]

[[Category:Dictionary]]