ABSTRACT
Stagflation is a controversial term among Western economists. Some economists consider it to be more political than economical and they question whether it is appropriate to apply it to socialist economies. This chapter deals with the aspects of the stagflation phenomenon in Western market economies during the 1970s. It examines similar phenomena in both reformed and Soviet-type Socialist economies. The chapter summarizes proposal to overcome stagnation in the reformed Socialist economies. The decline of growth rates, the increase of debts, and the worsening of the foreign trade situation, in both quantitative and qualitative terms, draw a clear picture of stagnation. The measurement of inflation raises another methodological problem. Regarding Socialist economies, inflationary problems are not considered as significant as in Western market economies since the Soviet-type prices are not realistic. Nevertheless, there have been attempts to describe the economic situation in the Soviet Union in terms of stagflation.
