Stagflation is a term that refers to the economic situation where there is a simultaneous combination of high unemployment levels and declining productivity growth, also known as stagnation, and high levels of inflation over long periods of time. This term was coined by the British politician Ian McLeod during a speech at the British Parliament in 1965.
Although some economists like Milton Friedman recognized the possibility of stagflation and consequently neglecting the Phillips curve, it was only after the events during the 1970s when this situation became well known. From 1969 to 1982, inflation averaged 7.5% annually while unemployment 6.4%.