Stagflation is the term used to describe an economy that has stagnate economic growth while having higher inflation and higher unemployment. Stagflation can be seemingly contradictory as stagnate economic output leads to higher unemployment, which normally should not lead to rising prices as economic demand falls. For the most part stagflation is rare, in fact we have not seen a stagflation type period for almost 50 years. We have to go back to the 1970’s to find a true stagflationary period.