Stagflation is a term used to describe the combination of slow economic growth and rising inflation that can occur in an economy. It occurs when an economy is stuck in a state where inflation is high, unemployment is rising, and GDP growth is low. This situation can lead to higher taxes and lead to further stagnation, creating a cycle of economic woe. To put it more simply, stagflation is a period of time where the economy isn’t growing and prices are rising at the same time.