Latest / Stagflation Conversations with Fexingo: High Inflation, Slow Growth, and 1970s Echoes
The Wage-Price Spiral Myth in Modern Stagflation
Lucas and Luna dissect why the classic wage-price spiral of the 1970s failed to materialize in late 2026, despite inflation running sticky above three percent. With real GDP growth slowing to two point two percent and unemployment ticking up to four point two percent, the data tells a different story than the textbooks. They examine how core PCE holding at one hundred thirty point five reveals that while prices remain elevated, the feedback loop between wages and inflation has fractured. The episode explores whether this decoupling is a temporary glitch or the new normal for monetary policy…
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