Economic crisis of the 1970s
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The malfunctioning at the end of the period of the 'thirty glorious years' degenerated into an economic crisis that we will quickly draw parallels for, with the crisis of the 1930s. However, the context and the content are radically different. It is therefore necessary to analyze in detail the circumstances of this economic deterioration which led to a situation that could be compared to a century of economic depression that the industrial world experienced in the last part of the nineteenth century, while waiting for the assertion of the second industrial revolution.
The main originality of the crisis of the 1970s versus the1930s is the fact that there was a combination of inflation (rising prices) and slowing growth. This combination gave rise to a new phenomenon which was termed stagflation. This situation did not exist in previous economic cycles; this new situation was reflected by an inability to manage an immediate and effective a phenomenon which has been misunderstood as development. This therefore caused a deep economic depression.
Among the signs that could be identified immediately, there is, of course, the pace of economic growth. This rhythm is the change in the average annual GDP. In the period 1974 - 1986, this rate even fell below 0 in 1975and 1982. The Third World non-oil producing countries experienced an even more dramatic economic depression. The causes of depression were many.
First, the explanation by the media, to the point that it became a myth, is the increase in price of raw materials and in particular the increase in oil prices. The oil price increase would have been painless had it been offset by increased exports of manufactured goods. However, producing countries were unable to absorb this increase in exports.
Tags: Economic crisis of the 1930s and 1970s, Stagflation, Increase in prices of oil and manufactured goods