What characterizes "stagflation"?

Stagflation is characterized by a combination of slow economic growth, high unemployment, and high inflation. This phenomenon is particularly problematic for policymakers because the typical tools used to combat inflation (such as raising interest rates) can further hinder economic growth and increase unemployment. During stagflation, an economy experiences stagnation, meaning it is not growing, alongside rising prices, which can lead to reduced consumer purchasing power and increased cost of living. This scenario presents a unique challenge as traditional economic theories do not adequately address the interplay of high inflation with stagnant economic conditions.