Blast From The Past

Stagflation is coming back. Is there a cure this time?

Banished for nearly a decade, the scourge of stagflation, with its fast- rising prices and dismal economic growth, is threatening the U.S. again. Inflation fighters, chief among them Federal Reserve Chairman Alan Greenspan, had hoped that the current combination of relatively high interest rates and sluggish growth would dampen price increases. But the Labor Department said last week that consumer prices rose 0.5% in March, bringing the annual inflation rate in the first quarter to 8.5%, the fastest pace in nearly eight years. "What's so scary about the number is that it's going to take more pain and punishment to bring...

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