Practice question · Put in order
Order the 1970s-80s macro events.
- Stagflation spreads across the West
- Second oil shock. Iranian Revolution (1979)
- Inflation falls, recovery begins (1983)
- Volcker raises rates above 20% (1980-81)
- First oil shock. OPEC embargo (1973)
Hints
- Two energy shocks bracket the decade.
- The disinflation cure came at the very end.
Show the answer
- First oil shock. OPEC embargo (1973)
- Stagflation spreads across the West
- Second oil shock. Iranian Revolution (1979)
- Volcker raises rates above 20% (1980-81)
- Inflation falls, recovery begins (1983)
Why
Two shocks, a decade of stagflation, then the Volcker cure, painful but effective.
Practise Oil Shocks and Stagflation
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