Narayana Kocherlakota, Columnist

Stagflation Is Just What the Economy Needs

The Federal Reserve should be — and appears to be — aiming for a period of elevated unemployment and inflation.

November 30, 2022 at 12:00 PM UTC

Narayana Kocherlakota is a Bloomberg Opinion columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.

Stagflation advocate?
Photographer: Al Drago/Bloomberg

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The US Federal Reserve’s pitched battle with rising prices has given rise to widespread concerns about a possible return of stagflation — the combination of high unemployment and high inflation that afflicted the US in the 1970s.

Actually, a bit of stagflation is just what the Fed should be — and appears to be — aiming for.