In the 1970s there was high inflation. There was energy shortage because of world wide oil shortage. There were low supplies of things like jobs, houses, cars and many other things. The economics of the 1970s was just as bad as it is today, its just more money.
During the energy shortage, there was also oil shortage. All around the world nation started to conserve their non-renewable oil supplies. They did this to maybe have some in the near future. They began to depend on the Middle East for oil because they didn’t have enough.
While the energy shortage was happening, a war started between the Arabs and Israel . It was oil called the “Arab Oil Embargo” that was placed on the west by the Arabs. The largest oil producers were Saudi Arabia, Iraq, and Kuwait. Because of this, gas prices would go from 35 cents to 90 cents.
There were high demands in the 70s. There were a lot of unemployed people. This was oil because of high inflation. People began to expect continuous increases in the price of goods. This caused demand which pushed up prices.
There were fewer jobs, cars and many other things in the 70s. President Jimmy Carter tried to help the unemployment. He tried to help them by increasing government spending. He also established voluntary wage. Something that caused high inflation was that investors and creditors had no confidence in the bank system.
The three main reasons to high inflation was first, it was because until the 1980s no influential policy makers until Paul Volcker became Chairman of the Federal Reserve who placed a sufficiently high priority on stopping inflation. Second, the policies of the 60s left economic policy makers of the 70s with bad dilemmas. They basically had bad luck which also led to high inflation. Third, it was that the great depression made it hard to believe that the business cycle was a fluctuation around rather than a shortfall below potential output and potential employment.
The poor economy was mainly because of the horrible amounts of unemployment. There were returning soldiers from Vietnam and the woman work force. It went from 3.3 percent of unemployed people to 8 percent of unemployed people. All of this almost caused another depression.
Some people are even saying that the 2009 economy is starting to be the same as the 70s economy. The oil crisis was really bad. With all of the gas prices raising more demands began to happen.
The 1970s economy didn’t get better till the 1980s because of the chairman. It took a long time for it to get better because nobody wanted to take the chairman position.
The economy of the 1970s was bad. With all of the gas prices raisin and the amounts of unemployed people. Also cars and other things, hopefully the economy we are in now will only have progress and won’t get worse. Like the war stopping, already the gas prices have gotten lower so it should only get better.