What Does Stagflation Mean for the Global Economy?

The world is grappling with a sharp deceleration in growth, coupled with rising inflation. Are we experiencing so-called stagflation, what does that mean for people, and what can we learn from comparable situations in the past?

In this episode of The Development Podcast, World Bank forecasting expert Franziska Ohnsorge, Manager of the Prospects Group, one of the lead authors of the Global Economics prospect Report; and debt expert Marcello Estevão Global Director of the World Bank Group's Macroeconomics, Trade and Investment global practice give the big picture on stagflation. While Enrique Cárdenas, a Mexican economist and economic historian, explains what it felt like to experience stagflation during the so-called “lost decade” of the 1980s. Listen now!

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Timestamps

[00:00] Welcome and introduction of the topic

[01:45] What is stagflation? When did we see it last? Are we in stagflation right now?

[06:42] Visions from Mexico, the 15th largest economy in the world

[11:47] Global economy: How significant is the slowdown right now

[13:09] How real is the risk of stagflation?

[14:57] Central banks and interest rates... and stagflation

[17:24] Impacts for average people in emerging markets and developing economies

[19:19] How can stagflation lead to debt crises?

[23:31] What is creating this toxic mix of slow growth and inflation?

[24:59] Recommendations for governments to promote growth and tame inflation

[29:21] Closure and thanks for tuning!

Featured Voices

• Franziska Ohnsorge, Manager of the Prospects Group, World Bank: "Stagflation, weak growth and high inflation, is something that really hurts the lower income households particularly hard."
• Marcello Estevão, Global Director of the World Bank Group's Macroeconomics, Trade and Investment Global Practice: "The debt overhang can be dismantled, if governance improved debt management procedures and public expanding while strengthening the living environment for debt contracting."
• Enrique Cárdenas, Mexican economist and economic historian: "Not every income was indexed to inflation and therefore those who weren't suffered even more because they couldn't cope with inflation as it evolves."

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