The last major bout of stagflation took place in the 1970s, when an oil shortage sent gas and other related prices soaring as it simultaneously dragged down economic output. But the crisis of the 1970s offers few lessons for the current moment, since the U.S. economy is far less reliant on gas expenditures and foreign oil, Harvey said.
end partial quote from:"stagflation."
This time the problem is Trump's Tariffs (exactly like Herbert Hoover which started the Great Depression) combined with Ice Raids which gut our labor force especially in places like Los Angeles, San Diego, Texas and Chicago and New York
Here are some quotes regarding what Stagflation the last time it happened in the1970s because of the Arab Oil Embargo:
The 1970s saw stagflation,
a rare economic condition of stagnant growth and high unemployment alongside high inflation. This was caused by supply shocks, such as the 1973 Arab oil embargo that quadrupled oil prices, and by loose monetary policies that increased the money supply faster than the economy grew. The economic instability led to gas lines, high unemployment, and a struggle for governments to manage both inflation and economic stagnation. Causes of Stagflation in the 1970s
- Oil Shocks: The 1973 Arab oil embargo and the 1979 Iranian revolution caused oil prices to surge, increasing production costs for businesses and contributing to inflation.
- Loose Monetary Policy: In the period before the stagflation, the Federal Reserve pursued policies that increased the money supply more quickly than the economy could grow, fueling inflation.
- Structural Economic Issues: Industrialization in developing countries and shifts in the global economy contributed to a period of weak growth and economic instability.
- Government Policies: The Nixon administration's price and wage controls in the early 1970s temporarily suppressed inflation but, when lifted, contributed to a surge in prices.
Consequences of Stagflation
- High Inflation: Prices rose rapidly, with inflation in the UK rising from 6.4% in 1970 to 18% by 1980.
- Economic Stagnation: The economy experienced low growth, and in some countries, GDP decreased.
- High Unemployment: Unemployment rates rose to troubling levels.
- Public Inconvenience: The oil crisis led to gasoline shortages and long lines at gas stations.
The Fight Against Stagflation
- Policy Challenges: Policymakers struggled to address the twin issues of high inflation and stagnant growth, as policies to combat one often exacerbated the other.
- Shift in Economic Theory: The 1970s stagflation forced a reevaluation of economic theories, including the idea that there was a trade-off between inflation and unemployment.
- Stagflation and the oil crisis (article) | Khan AcademyThe 1970s economic downturn was characterized by stagflation, a combination of price increases and wage stagnation. The crisis was...Khan Academy
1m
Show all
AI responses may include mistakes. Learn more
Stagflation in the 1970s was a period with both high inflation and uneven economic growth. High budget deficits, lower interest rates, the oil embargo, and the ...
People also ask
No comments:
Post a Comment