Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher reveals why stagflation—a term coined in the 1970’s to describe a period of high inflation and low economic growth—isn’t likely present in today’s economy.

Ken believes stagflation occurs when the real quantity of money increases at an accelerated rate and causes inflation to stick. He doesn’t see the real quantity of money—most appropriately measured by net bank lending—trending in an inflationary direction. He thinks inflation may linger longer than most hoped, but should eventually abate. While he acknowledges economic growth isn’t overly robust, he says the global economy is growing enough to escape stagflation. Ken also notes how the fear of stagflation could be a positive tailwind for markets if economic reality proves to be better than most expect.

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