Take Germany as an example of stagflation. Last year we had to fell a lot of trees because bark beetles. Everyone was dumping their bad lumber. A CDU politician introduced a 85% quota so that the markets can recover but now the situation has reversed and some forest owners are not allowed to harvest their lumber despite high prices. For small businesses losing those last 15% may make it unprofitable to harvest at all. Making it illegal to run businesses serving hot markets is a recipe for cost increases without corresponding wage increases.

However, in the US the investment rate is going up and businesses are expanding production. The biggest factor right now is the semiconductor shortage and there it is just a matter of time before things return to normal.