Editing Stagflation (section)

==Recent views==
Through the mid-1970s, it was alleged that none of the major macroeconomic models ([[Keynesian]], [[New Classical]], and [[monetarist]]) was able to explain stagflation.<ref>{{cite journal|last1=Helliwell|first1=John|title=Comparative Macroeconomics of Stagflation|journal=[[Journal of Economic Literature]]|publisher=[[American Economic Association]]|location=Nashville, Tennessee|volume=26|issue=1|date=March 1988|page=4}}</ref>

Later, an explanation was provided based on the effects of adverse supply shocks on both inflation and output.<ref name="blanchard">
{{cite book
  | last = Blanchard
  | first = Olivier
  | title = Macroeconomics (Instructor's Review Copy)
  | edition = 5th
  | pages = 152, 583, 584, G–9
  | publisher = [[Prentice Hall]]
  | location  = Hoboken, New Jersey
  | year = 2009
  | isbn = 978-0-13-013306-9}}</ref> According to Blanchard (2009), these adverse events were one of two components of stagflation; the other was "ideas"—which [[Robert Lucas Jr.|Robert Lucas]], [[Thomas Sargent]], and [[Robert Barro]] were cited as expressing as "wildly incorrect" and "fundamentally flawed" predictions (of [[Keynesian]] economics) which, they said, left stagflation to be explained by "contemporary students of the [[business cycle]]".<ref name="blanchard2">
{{cite book
  | last = Blanchard
  | first = Olivier
  | title = Macroeconomics (Instructor's Review Copy)
  | edition = 5th
  | pages = 153, 583, G–9
  | publisher = Prentice Hall
  | year = 2009
  | isbn = 978-0-13-013306-9}}</ref> In this discussion, Blanchard hypothesizes that the recent [[oil price]] increases could trigger another period of stagflation, although this has not yet happened (pg. 152).