Stagflation
Stagflation combines what standard models said couldn't coexist: high inflation and stagnant growth with rising unemployment. The 1973–75 episode was the canonical case — the oil embargo quadrupled energy prices, forcing the Fed to choose between fighting inflation (worsening unemployment) and supporting growth (worsening inflation). It chose both, sequentially, and got both.
Why it's the hardest case
Normal recessions are demand failures — stimulus fixes them. Stagflation is a supply failure: the economy's capacity itself shrank, so stimulating demand only feeds inflation. The cure — Volcker's 20% rates — required inflicting a recession severe enough to break the inflation psychology.
Why it still matters
2022 raised the specter again: 9% CPI with an inverting curve. The difference from the 1970s was expectations — breakevens stayed far below the headline, peaking near 3% against 9% CPI, meaning the supply shock hadn't become embedded. That's the distinction that determined whether a single recession or a decade of stagflation followed.