tag:blogger.com,1999:blog-2098432983500045934.post770286075513458175..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Documenting the origin of the term 'stagflation'The Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2098432983500045934.post-3006528853775879342020-11-02T12:46:01.031-05:002020-11-02T12:46:01.031-05:00In the Nelson & Nikolov PDF, page 9, the secon...In the Nelson & Nikolov PDF, page 9, the second footnote:<br />"Macleod used the term again in a speech to Parliament on 7 July 1970 and confirmed that he had invented the word. From then on, the term was common parlance in UK economic policy debate, being used, for example, in an article in The Economist of 15 August 1970. Some sources (eg Hall and Taylor (1997)) attribute the term to Paul Samuelson (1975). But the earliest occasion on which we have found Samuelson used the word was in a Newsweek column of 19 March 1973, entitled ‘What’s Wrong?’, reprinted in Samuelson (1973, pages 178–80)"<br /><br />Paul Samuelson used the word <i>stagflation</i> in March of 1973.<br />But according to <a href="https://en.wikipedia.org/wiki/1973_oil_crisis" rel="nofollow">Wikipedia</a>, "The 1973 oil crisis began in October 1973".<br />So I'm pretty confident Samuelson was not referring to the consequences of the oil crisis when he used the word "stagflation".<br /><br />Some people take stagflation to mean high inflation plus recession. It is used that way to describe the effects of the oil crisis, by people who say stagflation first happened when the 1973 oil crisis caused us to have high inflation and recession at the same time.<br /><br /><a href="https://www.quora.com/Is-there-a-difference-between-cost-push-inflation-and-stagflation-or-is-it-one-and-the-same-thing?share=1" rel="nofollow">Don Sillers at Quora</a> conveys the idea:<br />"The phrase “stagflation” was coined in the United States in the mid-1970s, to describe a period in which inflation was rising along with high unemployment – much to the surprise of the many adherents of the Phillips Curve, which in those days was seen as mapping out a stable trade-off between inflation and unemployment."<br /><br />Don describes a rigid trade-off that meant, basically, EITHER you get inflation OR you get recession, but you DON'T GET BOTH at the same time. If you keep to that rigid trade-off, then we couldn't have had stagflation until the recession started in <a href="https://fredhelp.stlouisfed.org/fred/data/understanding-the-data/recession-bars/" rel="nofollow">November 1973</a>.<br /><br />So what the hell was Samuelson talking about, in March of 1973?<br /><br />My definition of stagflation is more relaxed. If unemployment is higher than you can reasonably expect, for the level of inflation you're getting, then call it stagflation. No recession required.<br /><br /><a href="https://www.economicshelp.org/blog/glossary/stagflation/" rel="nofollow">Pettinger at Economics Help</a> defines stagflation the rigid way --<br />"Stagflation is a period of rising inflation but falling output..."<br />But he allows for the more relaxed view like mine:<br />"People may talk about stagflation if there is a rise in inflation and a fall in the growth rate. This is less damaging than higher inflation and negative growth. But, it still represents a deterioration in the trade-off between unemployment and inflation."<br />Yeah! Pettinger adds:<br />"The traditional Phillips curve suggests there is a trade-off between inflation and unemployment. A period of stagflation will shift the Phillips curve to the right, giving a worse trade-off."<br />There ya go! Stagflation shifts the Phillips curve. Exactly.<br /><br />Perhaps Samuelson was talking about stagflation in the UK or somewhere? I'd need to read the Newsweek article to find out. The reference <i>Samuelson (1973, pages 178–80)</i> refers to:<br /><b>Samuelson, P A (1973), The Samuelson sampler, W W Norton.</b><br />And the <i>Newsweek</i> column, ‘What’s Wrong?’, is in the 19 March 1973 issue.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-36514488533700487722017-02-20T13:31:45.996-05:002017-02-20T13:31:45.996-05:00Oh, and I was so pleased with myself!
:)
It never ...Oh, and I was so pleased with myself!<br />:)<br />It never occurred to me to use a dictionary. I have no excuse. Thanks Michael.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-25059447055852437802017-02-20T10:55:50.747-05:002017-02-20T10:55:50.747-05:00The OED can sometimes make this kind of hunt easy....The <i>OED</i> can sometimes make this kind of hunt easy. The first citation for <i>stagflation</i> is “1965 I. Macleod <i>Hansard Commons</i> 17 Nov. 1165/1,” with the first two sentences of the passage you quoted from the encyclopedia article.<br /><br />I’m not trying to discount your detective work — just suggesting an easier way to start.Michael Leddyhttps://www.blogger.com/profile/05547732736861224886noreply@blogger.com