​ The US economy is entrenched in an era of anemic economic growth and rising inflation. It is a phenomenon we call the “New Stagflation.†This is a kinder, gentler version of its 1970s predecessor for sure. The current economic conditions are certainly not as dire as they were back then - inflation at an alarming 15% amidst a contracting economy!  However, the New Stagflation leaves policy makers facing a similar bipolar policy situation. Which one of the negative features should monetary policy respond to?
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