Jv:
The term stagflation is the combination of ‘stagnation’ and ‘inflation’.
The primary causes include the expansion of the money supply feeding into higher inflation, as well as supply shocks, which can drag on economic growth.
During periods of stagflation, consumers spend more on items such as food and clothing, while earning less—reducing their purchasing power. Less purchasing power can eventually cause people to buy less, leading to falling corporate revenues, which can ripple across the economy.