Word invention is a fine art. Shakespeare was pretty good at it: equivocal, moonbeam, hobnob. He played with language, sandwiching nouns together to make new ones. Sarah Palin's self-comparison to the playwright (when mocked for inventing "refudiate") missed the point. There were plenty of perfectly good words - refute, repudiate - that expressed her intended meaning, whereas Shakespeare needed new ones because his imagination stretched beyond the limits of language.

Stagflation - much bandied around at the moment as we approach its grisly realisation - was invented by the Conservative politician Iain Macleod.
He had his Shakespeare moment in the House of Commons on 17 November 1965: "We now have the worst of both worlds," he said - "not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation."

I wonder how long it took him to come up with it. You can hear the thought process: "Stagnation, inflation, stagnation, inflation . . . stagflation!" And then a little dance. Technically, it's a portmanteau - a combination of two words, usually the beginning of one and the end of the other. The media love such creations, that buzzword feeling. And economists clearly love them, too - there's hyperinflation, biflation, even agflation, describing inflation caused by the rise in agricultural commodity prices.

All are hideous, stagflation in particular. Perhaps it's the forced marriage of two perfectly content, separate words. Together, they seem to rub each other up the wrong way. The result sounds a bit like a disease and conjures a strange, disturbing image of an inflating stag. Unfortunately, stagflation isn't going away: the recent poor growth figures show that "1970s-style stagflation" (it is always 1970s-style - poor 1970s; the decade's economic reputation is routinely dragged through the mud) is a realistic possibility. So we had better get used to it. But if only Shakespeare were around to prettify it slightly! If ever a word needed a bit of moonbeam magic, stagflation is it.

Sophie Elmhirst is features editor of the New Statesman

This article first appeared in the 07 February 2011 issue of the New Statesman, The New Arab Revolt