INFLATION VS STAGFLATION.

[Bitco55]

When trying to stabilize the economy, government face a difficult choice to make, and that is risking inflation, & risking stagflation. Growth ought to be stimulated, but it my lead to inflation. The monetary definition of inflation explains that when there is way too much money in circulation, but fewer foods in supply, it'll lead to the high rise in prices. A good example is when workers ask for increase in their wages and salaries. They earn more, but goods get fewer and more expensive real quick. In Nigeria, between 2023-2025 inflation soared above 30%, mostly due to the removal of fuel subsidy. Even during the period, people earned, but the currency devaluated and food price hiked.

The other choice government have to face is tightening the economy with strong monetary policies. This may lead to stagnation or even recession. In pursuit of a stable, inflation free economy, the Central Bank may raise interest rates, making burrowing really expensive. This process is carried out simply to collect money from the public, but it usually leads to slow down of businesses, unemployment rise, and stalling of growth. There may be stable prices of goods but little to no money to acquire it. So, basically the government has to choose between letting their citizens be broke but with stable prices of goods and services, and being slightly richer but having to pay double for goods and services.

Sometimes, some countries face the worst of both choices, which is STAGFLATION, i.e, weak growth and rising prices. Economics experts believe that not all 4 major economic objectives can be achieved by a country all at once, as trying to attain one may lead to the downside of another.

So, in this case, do you think the government ought to prioritize price stability, which is, fighting inflation at all cost, or the growth of the country by creating more jobs and activities, though at the risk of higher prices?

[pooya87]

So, in this case, do you think the government ought to prioritize price stability, which is, fighting inflation at all cost, or the growth of the country by creating more jobs and activities, though at the risk of higher prices?

I say they should first figure out the cause of the issues then try to fix them instead! This needs new tactics not the old games they used to play with things like raising/cutting interest rates, printing more money, giving subsidies, ...

For example the main cause of all economic problems today is instability and lack of security as the world inches closer to more armed conflicts. Take Europe for example. The main reason for the deindustrialization of Europe apart from high energy prices is exactly that lack of security in the long run. It is getting worse every day as well as they insist of expanding the war in Eastern Europe (they've already deployed troops and are carrying out false flag operations against their own civilian airfields to convince the people of necessity of the war!).

In such a situation, nobody in their right mind would make an investment. Jobs will be lost as companies, factories, .... shut down and production shrinks. In such a situation, the governments cannot do anything to get price stability, low inflation, low recession, ... if they use their old tactics.
They'll need to bring back stability and that's something many of them have no plans on doing...

[Mhizlove]

Okay when it's comes to the discussion between inflation and stagflation I will say the questions of what the government should focus on become quite conflicted, should they  focus on how to fight inflation with every achievable tools they have to ensure affordability for citizens or rather turn their attention on how to create job opportunities and stimulating activity if that might cause a higher price .
When inflation is moderate the government's main aim is to keep the price stable but when it's comes to stagflation the situations becomes more delicate. Because during inflation the purchasing power of money reduces and what you buy yesterday at a low cost as much as $ 500  will be $ 1000  today and this affects the ordinary individuals or citizens especially those who's income do not rise as fast as the price of things. When it comes to stagflation is said to be when inflation remains  high which barely makes the economy grow and unemployment rate increases, it's said to be the most dangerous because it's combined the worst of both. All m saying is that it's not a matter of choosing one over the other because as a wise government only by doing both can defend the citizens from the stress of unaffordable living and limited employment.