Editing Stagflation (section)

==Alternative views==
===As differential accumulation===
{{Main|Differential accumulation}}
[[Political economy#Current approaches|Political economists]] [[Jonathan Nitzan]] and [[Shimshon Bichler]] have proposed an explanation of stagflation as part of a theory they call [[differential accumulation]], which says firms seek to beat the average profit and capitalisation rather than maximise.{{cn|date=November 2024}} According to this theory, periods of mergers and acquisitions oscillate with periods of stagflation. When mergers and acquisitions are no longer politically feasible (governments clamp down with anti-monopoly rules), stagflation is used as an alternative to have higher relative profit than the competition. With increasing mergers and acquisitions, the power to implement stagflation increases.

Stagflation appears as a societal crisis, such as during the period of the oil crisis in the 70s and in 2007 to 2010. Inflation in stagflation, however, does not affect all firms equally. Dominant firms are able to increase their own prices at a faster rate than competitors. While in the aggregate no one appears to profit, differentially dominant firms improve their positions with higher relative profits and higher relative capitalisation. Stagflation is not due to any actual supply shock, but because of the societal crisis that hints at a supply crisis. It is mostly a 20th and 21st century phenomenon that has been mainly used by the "weapondollar-petrodollar coalition" creating or using Middle East crises for the benefit of pecuniary interests.<ref>{{cite journal |last=Nitzan |first=Jonathan |date=June 2001 |title= Regimes of differential accumulation: mergers, stagflation and the logic of globalization |journal=Review of International Political Economy |volume=8 |issue=2 |pages=226–274 |url=http://bnarchives.yorku.ca/3/ |doi=10.1080/09692290010033385 |hdl=10419/157771 |s2cid=55578813 |hdl-access=free }}</ref>

===Demand-pull stagflation theory===
Demand-pull stagflation theory explores the idea that stagflation can result exclusively from monetary shocks without any concurrent supply shocks or negative shifts in economic output potential.  Demand-pull theory describes a scenario where stagflation can occur following a period of monetary policy implementations that cause inflation.  This theory was first proposed in 1999 by Eduardo Loyo of [[Harvard University]]'s [[John F. Kennedy School of Government]].<ref>{{Cite journal|last1=Loyo|first1=Eduardo|date=June 1999|title=Demand-Pull Stagflation (Draft Working Paper)|publisher=National Bureau of Economic Research New Working Papers|url=http://www.nber.org/~confer/99/efcesi99/loyo.pdf|access-date=30 May 2018|archive-date=16 February 2008|archive-url=https://wayback.archive-it.org/all/20080216020755/http://www.nber.org/~confer/99/efcesi99/loyo.pdf|url-status=dead}}</ref>

===Supply-side theory===
[[Supply-side economics]] emerged as a response to US stagflation in the 1970s. It largely attributed inflation to the ending of the [[Bretton Woods system]] in 1971 and the lack of a specific price reference in the subsequent monetary policies (Keynesian and Monetarism).  Supply-side economists asserted that the contraction component of stagflation resulted from an inflation-induced rise in real tax rates (see [[bracket creep]]).<ref name="gceps"/>

===Austrian School of economics===
Adherents to the [[Austrian School]] maintain that creation of new money [[ex nihilo]] benefits the creators and early recipients of the new money relative to late recipients. [[Money creation]] is not wealth creation; it merely allows early money recipients to outbid late recipients for resources, goods, and services. Since the actual producers of wealth are typically late recipients, increases in the money supply weakens wealth formation and undermines the rate of economic growth. Austrian economist Frank Shostak says: "The increase in the money supply rate of growth coupled with the slowdown in the rate of growth of goods produced is what the increase in the rate of price inflation is all about. (Note that a price is the amount of money paid for a unit of a good.) What we have here is a faster increase in price inflation and a decline in the rate of growth in the production of goods. But this is exactly what stagflation is all about, i.e., an increase in price inflation and a fall in real economic growth.  Popular opinion is that stagflation is totally made up. It seems therefore that the phenomenon of stagflation is the normal outcome of loose monetary policy. This is in agreement with Phelps and Friedman (PF). Contrary to PF, however, we maintain that stagflation is not caused by the fact that in the short run people are fooled by the central bank. Stagflation is the natural result of monetary pumping which weakens the pace of economic growth and at the same time raises the rate of increase of the prices of goods and services."<ref name="shostak">{{citation|title=Did Phelps Really Explain Stagflation?|language=en|first=Frank|last=Shostak|work=Mises Institute|date=2006-10-10|access-date=2024-11-16|url=https://mises.org/mises-daily/did-phelps-really-explain-stagflation}}</ref>{{better source needed|date=November 2024|reason=[[WP:MISES|Consensus]] is that this outlet is unreliable}}{{long quote|date=November 2024}}

===Jane Jacobs and the influence of cities on stagflation===
In 1984, journalist and activist [[Jane Jacobs]] proposed the failure of major macroeconomic theories<ref group=notes>including those of [[Adam Smith]], [[Karl Marx]], [[John Stuart Mill]], [[John Maynard Keynes]], [[Irving Fisher]], and [[Milton Friedman]]</ref> to explain stagflation was due to their focus on the nation as the salient unit of economic analysis, rather than the city.<ref>{{cite book|last1=Jacobs|first1=Jane|title=Cities and the Wealth of Nations|date=1984|publisher=Random House|location=New York|isbn=0394480473|url-access=registration|url=https://archive.org/details/citieswealthof00jaco}}</ref> She proposed that the key to avoiding stagflation was for a nation to focus on the development of "import-replacing cities" that would experience economic ups and downs at different times, providing overall national stability and avoiding widespread stagflation. According to Jacobs, import-replacing cities are those with developed economies that balance their own production with domestic imports—so they can respond with flexibility as economic supply and demand cycles change. While lauding her originality, clarity, and consistency, urban planning scholars have criticised Jacobs for not comparing her own ideas to those of major theorists (e.g., [[Adam Smith]], [[Karl Marx]]) with the same depth and breadth they developed, as well as a lack of scholarly documentation.<ref>{{cite journal|last1=Hill|first1=David|title=Jane Jacobs' Ideas on Big, Diverse Cities: A Review and Commentary|journal=Journal of the American Planning Association|date=1988|volume=54|issue=3|pages=302–314|doi=10.1080/01944368808976491}}</ref> Despite these issues, Jacobs' work is notable for having widespread public readership and influence on decision-makers.<ref>{{cite journal|last1=Hill|first1=David|title=Jane Jacobs' Ideas on Big, Diverse Cities: A Review and Commentary|journal=Journal of the American Planning Association|date=1988|volume=54|issue=3|page=312|doi=10.1080/01944368808976491}}</ref>