Ask HN: Why stagflaction happens?
Thus, I also hear, that a constant level of low inflaction, makes people want to spend their money, and thus spur economic activity, and maybe some growth.
I live in Brazil, and in the last two years, I heard a lot of people complaining of inflaction and no salary rise... At first I thought it was some sort of psychologial thing or cronical complaining...
But in 2012 we had only 0.9% of GDP growth, and 5.8% of inflaction, and currently our GDP growth is not getting better (in fact it retracted in february) while inflaction is rising (6.3%), in fact, even more interestingly is looking beyond those numbers, and looking at the numbers that matter for most people, that is the inflaction of food prices, something that everyone must buy, those according to IPCA are 8.8%, but we can highlight some classes of basic products, like vegetables, that had a 46.67% increase in the last quarter.
Yet, I kept hearing in the last two years from people in the commerce sector (not services, those were not complaining much) that they were having terrible sales, only slightly better than 2009 (the height of the great recession here), the supermarket association for example that in the 12 months period leading to february they had a 4% real contraction in gross income.
If Brazil is having such problems with inflaction (to the point last week political magazines were all running cover stories on the price of tomato, that rose 70.45% on this quarter alone), why the GDP growth is struggling?
We have historic low unemployment and inflaction, why people are not spending money? Why commerce people (not only retailers, but I also spoke with B2B sellers) are complaining so much that they are selling less than the last years? (excepting 2009)