What is stagflation and why is it a concern now?
Brad, the term stagflation is when there is no growth but inflation keeps rising. We haven't had that in New Zealand for quite some time, but it's always on the tip of economists' tongues, I think, because who knows, you know, with the recovery not going so well, are we going to go that way with the oil shocks, et cetera? What's your view on that?
I mean, look, the stagflation issue is when you have the economy that's stagnant, but you have inflation to come with it. And that does often come through more when you have the likes of a supply shock rather than a demand shock. It's when you've got that pressure on the economy where there's just not enough stuff to work with. You don't have the fuel or anything else.
Everyone goes back into their shelves because they're worried about just how much the economy can sort of move forward. So... Yeah, we are concerned about it. I think as well, though, that we're in a different place from the last time we had stagflation, you know, back in the 70s and 80s. It was a different kind of economic setup. You know, the government controlled a lot more.
We weren't as globally interconnected. There weren't as many sort of different options out there. So we're always worried about stagflation. Absolutely. But I think also the stagflation, if we saw it in the 2020s, would be something unique or different again. And it would also have sort of different economic ramifications. So worried, but in a different way to how we might have before.