What causes stagflation?

Rising prices, high unemployment, slow economic growth are the causes of stagflation. Due to oil embargoes, and as a result of fiscal and monetary policies, stagflation occured in the 1970s. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

The combination of rising inflation and a weak economy led to stagflation. Stagflation is caused by a shift of the aggregate supply curve to the left.

Further readings:

  1. Inflation Targeting: Methods, Drawbacks and Benefits
  2. Indian Economy Notes For UPSC Exam [Download PDFs]

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