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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is a Soft and Hard Fork?
  20. 20. Blockchain - examples of use
  21. 21. Is blockchain safe?
  22. 22. What are the types of blockchain networks?
  23. 23. What is blockchain network congestion, and how does it work?
  24. 24. Cryptocurrency wallets: Hot Wallet vs. Cold Wallet - key differences!
  25. 25. Cryptocurrency wallet diversification
  26. 26. Halving Bitcoin - what is it, and how does it affect the price?
  27. 27. Blockchain versus databases: key differences!
  28. 28. How do you transfer cryptocurrencies?
  29. 29. The most important cryptocurrency acronyms/slang you need to know!
  30. 30. The memecoin story: madness or great investment?
  31. 31. What is Ethereum? 
  32. 32. Everything you need to know about gas fees in Ethereum!
  33. 33. Gavin Wood: Blockchain Visionary and Co-Founder of Ethereum
  34. 34. Decentralized Apps – what are they?
  35. 35. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  36. 36. What is the Proof of Authority (PoA) consensus mechanism?
  37. 37. What is Proof of Burn (PoB)?
  38. 38. What is a whitepaper? What is its purpose, and how do you write it?
  39. 39. Smart Contracts - what are they?
  40. 40. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  41. 41. Blockchain and NFT games - how to make money on them?
  42. 42. Liquidity in the cryptocurrency market
  43. 43. Inflation and its effects on financial markets
  44. 44. What is stagflation and why does it have a negative impact on the market?
  45. 45. What are utility tokens and what use do they have in the cryptocurrency sector?
  46. 46. What is cryptocurrency mining?
  47. 47. What is the mining difficulty?
  48. 48. What is compound interest, and how does it work?
  49. 49. What Are Privacy Coins and Are They Legal?
  50. 50. What is CBDC - central bank digital money?
  51. 51. What is Cryptocurrency Airdrop all about?
  52. 52. Key differences between ICO, IEO and STO
  53. 53. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  54. 54. What is EURT? How does it work?
  55. 55. What is the difference between Circulating Supply and Total Supply?
  56. 56. Snapshot from the world of cryptocurrencies - what is it?
  57. 57. What is the Fear and Greed index for cryptocurrencies?
  58. 58. APR versus APY: what is the difference?
  59. 59. What is an Initial Farming Offer (IFO)?
  60. 60. What is Regenerative Finance (ReFi)?
  61. 61. Who Is Craig Wright, the Alleged Creator of Bitcoin?
  62. 62. What Is Bitcoin (BTC.D) Dominance?
  63. 63. Michael Saylor, Self-Proclaimed Bitcoin Maximalist
  64. 64. Bitcoin Pizza Day
  65. 65. AI blockchain - a new look into the future?
  66. 66. What is WorldCoin? Everything you need to know about this cryptocurrency!
  67. 67. Azuki NFT collection guide: everything you need to know about it!
  68. 68. The 10 most expensive non-fungible tokens (NFTs) ever!
  69. 69. The Bored Ape Yacht Club (BAYC) - the story of the popular NFT collection!
  70. 70. CyberPunks - the story of the most popular NFT collection in the crypto industry!
  71. 71. NFT Art: The digital art revolution - history and examples!
  72. 72. Who is Changpeng Zhao, CEO of Binance?
  73. 73. Who is Brian Armstrong - CEO of Coinbase?
  74. 74. Who is Galy Gensler and the SEC? How does the Securities and Exchange Commission (SEC) affect the cryptocurrency market?
  75. 75. Web3's most popular social media platforms! Will they replace the platforms we know?
  76. 76. What is IoT - the Internet of Things?
  77. 77. On-chain analysis in the cryptocurrency world: Everything you need to know about It
  78. 78. Can you pass on your cryptocurrencies after death? How do you pass on a cryptocurrency inheritance?
  79. 79. What is the Howey test? What application does it have in cryptocurrencies?
  80. 80. The use of blockchain technology in the world of sport
Lesson 44 of 80
In Progress

44. What is stagflation and why does it have a negative impact on the market?

Understanding basic economic issues is very important in our lives. It will make it easier for us to make financial decisions and broaden our horizons related to the monetary economy.

In today’s lesson, we will focus on a detailed explanation of what stagflation is. Have you ever encountered this term in your life? Do you know what its causes are and why it has a negative impact on the market? Read on for the answers to these questions!

What Is Stagflation?

This is an economic cycle that is characterized by very slow economic growth and a high unemployment rate. Stagflation and the whole process is accompanied by inflation. According to economic experts, the combination is difficult to control. Why? Because any attempt to correct one of the factors that contribute to stagflation can exacerbate the others.

Interestingly, back in the day, stagflation was considered impossible by economists. Despite this, it appeared in the markets repeatedly and even in highly developed countries. The beginnings of stagflation have been recorded since the oil crisis in the 1970s.

The term “stagflation” itself was first used by British politician Iain Macleod, during his speech to the House of Commons in 1965. It was a period of economic stress in the UK. Where did the idea for the term come from? The politician combined the effects of inflation and stagnation into one word.

The word came up again in the 1970s, during the aforementioned oil crisis in the US. At that time, stagflation caused negative GDP growth for five consecutive quarters.

The effects of stagflation can be vividly illustrated through the utilization of the misery index, which combines both the inflation rate and the unemployment rate. This index serves as a tangible measure that captures the true impact of stagflation on individual countries, evoking a sense of dismay and concern.

How Does Stagflation Work?

As we said, stagflation is influenced by three economic factors: stagnation, high inflation and high unemployment. In stagnation, slow economic growth causes high unemployment. With a lot of people looking for work, we have lower wages. Add to that inflation, which causes prices to rise in the market, which at the same time reduces the purchasing power of consumers.

At such a moment in the market, investors also suffer losses. You will probably ask – why? Because stocks and bonds perform worse during stagflation. Lack of economic growth affects stock prices, while high inflation affects bonds.

What Are the Reasons for Stagflation?

And here we have several versions, for every economist has an opinion. There is no clear-cut position among them. Nevertheless, over the years they have put forward some of the most plausible arguments.

Opinion one: Stagflation can be caused by oil price spikes. This has been noted especially in the American market. In the US, a sudden increase in the cost of oil reduces the productive capacity of the economy. The best example of this is the oil crisis of the 1970s. How did this happen? In 1973, the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo against Western countries. This caused oil prices to soar around the world. Thus, the cost of goods and unemployment rose. And here a cause and effect sequence occurred. As transportation costs increased, making products and getting them to store shelves became more expensive. Prices rose even as people lost their jobs.

Opinion two: Bad economic policy. According to this theory, the combination of stagflation and inflation is attributed to poor economic policy. Specifically, the theory highlights the role of stringent and often unreasonable regulation of markets, commodities, and inflationary labour as the primary cause of stagflation.

Opinion three. Monetary factors. Lack of currency backing in commodities results in restrictions on monetary expansion and currency devaluation.

To reach a real consensus on the concept of stagflation, economists would have to redefine the term inflation. In particular, take into account modern monetary and financial systems. In practice, economists and politicians assume that prices will rise anyway. They focus on the acceleration/deceleration of inflation, not on inflation itself.

How to Prevent Stagflation?

Here, too, there is no clear answer. Admittedly, economists agree on one thing – in such a situation, it is necessary to increase economic productivity enough to lead to higher economic growth without causing inflation to rise. These measures simultaneously enable the tightening of monetary policy and the reduction of the inflationary component of stagflation.

Unfortunately, it is easier said than done to put the above measures into practice.


There are several other economic factors contributing to stagflation. Unfortunately, there is no cure for it, and there are many causes for its occurrence.

At the macroeconomic level, economists can only encourage policymakers to take effective and rational anti-stagflation measures. Policies aimed at economic growth and productivity are also helpful in combating stagflation.