Iain Macleod coined the economic term “stagflation” in a 1965 speech to the British Parliament.
Macleod, a Conservative politician who later served as Chancellor of the Exchequer, combined “stagnation” and “inflation” to describe an unusual economic situation. His speech referred to Britain’s simultaneous experience of rising prices and weak economic performance.
The term became especially influential during the 1970s, when several industrial economies faced high inflation, slow growth, and elevated unemployment. Traditional economic models often treated inflation and unemployment as opposing problems, so their coexistence challenged established policy assumptions.
Macleod’s coinage is sometimes mistakenly attributed to economists who later developed theories about stagflation, including Milton Friedman. Friedman helped explain why persistent inflation could coexist with unemployment, but Macleod used the word years earlier.