Re: how does economics explain stagflation?

Rising prices and falling demand can occur as they did in the 70s due
to trade unions raising the real wage while at the same time demand is
falling due to many different factors such as firms not investing
(thus not creating value and stimulating demand to buy their products)
or a collapse of an export market. I would disagree that land
inflation and also house prices and other assets cause stagflation.
Japan has felt many years of sluggish growth due to a collapse of
asset markets and indeed it is a collapse of asset prices that can
severely dent demand thus causing stagflation (assuming unions are in
the meantime demanding higher wages).
.

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