STAGFLATION

The below article is pure fiction. It does not contain any facts. It is fake news entirely (except the article linked).

I don't wanna waste your time - mine either. Stagflation is a perverted state of the economy. I think this article has a pretty good explanation about stagflation.

I also know (or assume at least) that there are a lot of countries affected by this nowadays - I will focus on a small country with an extremely open economy (openness makes it more vulnerable to any kind of negative effects in the global economy).

So this shit state of economy has something to do with unemployment, right? In the article I linked they talk about the so called Phillips curve. Some kind of tradeoff between inflation and unemployment?

(I hope not giving companies ideas about how to exploit us even more. Companies who create unemployment only, please have some commonsense, please change immediately)

Let me ask something. If there is a tradeoff between unemployment and inflation, then why don't the people in power position and successful companies let the inflation rage without limits, and drag the unemployment levels to 0.0%???

If the curve exists in the economy, then it is a question of choice only. Why don't those people who can do something choose or at least prefer this option?

I assumed so far that decreasing unemployment, dragging it to 0 is an absolute goal for anyone in power. I thought this was out of question: If you are a person in power or a company that has powerful decisions in terms of the economy, and if you need to choose between unemployment and inflation, you always choose the latter. It seems I was wrong. Those people are more pathetic than I thought, than anyone thought.

So back to the stagflation of this small country, (poor country in the Eastern periphery of the European Union). If I want to be honest, the economy is stagnating since 2022, this makes at least 3 consecutive years. Inflation is still high (or very high in 2023, 2024 as well). So inflation and an economy that doesn't grow - this is stagflation, I think this is out of question.

(poor country in the Eastern periphery of the European Union) has structural problems with its economy since the collapse of the Soviet Union which was the main market it sold goods to. People like me have vivid memories of the end of the 1990s when severe crisis and inflation hit the country quite bad. This was the age of sky-rocketing unemployment too. That was stagflation from hell, or even worse.

So are we back to the middle of 1990s? I think long-term stagflation is way more destructive and has terrible consequences in the economy than a "simple crisis coming from the financial sector" (like 2008).

So are we back to the middle of 1990s? It would not hurt to know whether we are heading the same thing as in 1995 for example (huge pack of austerity measures). And long-lasting unemployment due to "economy in transition"?

Note: Ask Copilot about "Hungarian economy in 1995".

The thing is that, if I am right and this is a long-term stagflation, with all of its consequences, then this is the 2nd transitional crisis of this economy in the past 31 years.

This would mean structural changes. All I can say is that the basis of the economy is not so stable, if a U-turn needs to be done every 31 years.

I think the world of work is sick in Eastern Europe. These countries are not "cheap enough" to compete with India or brainless AI solutions, and they have just a tiny number of companies that are big and successful enough to be "committed" to remain in the country whatever happens.

In other words: when the shit hits the fan, only a tiny number of big employers remain in the country, the others are fleeing the moment they can. No companies are big enough to absorb the unemployed masses of an entire countries.

So at the end of the day, the root cause of this stagflation is what this poor country did in the past 31 years:

• to fix structural problems in the economy,
• to fix low productivity,
• to avoid extreme dependence on some sectors that are known to be vulnerable to every little change in the global economy

- absolutely nothing.

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The above article is pure fiction. It does not contain any facts. It is fake news entirely, except the article linked.