Hardly a day goes by without news about inflation and the growing risk of recession. The pain of higher prices is being felt by consumers around the world. In the United States, the Consumer Price Index (CPI) has risen at some of the fastest rates since the early 1980s.
Historically, such high bouts of inflation have been quickly followed by recessions and widespread job losses. This “stagflation” is what occurred in the 1970s and early 1980s—an unpleasant mix of double-digit inflation, declining economic activity, and high unemployment. What are the risks that history repeats?