Stagflation

There is a word that I have heard thrown about in the media lately, Stagflation. But what is it? What causes it? Where on earth did the name come from? and most importantly why, oh WHY is Paris Hilton a celebrity????? Of all these only three can be answered.
first the easy one.

The word, stagflation comes from the combination of the first syllable of stagnation the rest of the word comes from the second and third syllables of inflation. the word was first used by
Ian MacLeod the United Kingdom Chancellor of the Exchequer in a speech to parliament in 1965. What causes stagflation, what is it? In order to accurately answer those questions you have to combine the two. Stagflation is caused by prolonged periods of high inflation combined with sluggish growth. It seems that we are hearing about this because U.S. consumer price inflation hit 4.3% in November from the year before, while producer price inflation at 3.2% year-on-year basis was the fastest since 1973, right before we sank into the last bout of stagflation.

No less an expert than Alan Greenspan said We are beginning to get not stagflation, but the early symptoms of it. So while we do have a combination of inflation and sluggish growth. Stephan Jen points out that the inflation data reflects the immediate past, rather than the future. U.S. growth will be close to 5% and consumption is still strong. I continue to believe that if the U.S. falls into recession, inflation will decelerate. he wrote in a note to clients.
As far as the last answer is concerned scientists are still trying to figure it out. Time to put away the soapbox again.

Till next time, keep on ranting fellow lunatics,
Tim