Stagflation breaks the old Keynesian consensus
Citations (2)
- The Great Inflation whole source
Federal Reserve History source for the Great Inflation, oil shocks and policy rethink.
- What Is Keynesian Economics? whole source
IMF Keynesian overview summarizes stagflation and the waning of old Keynesian theory.
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Consequences
what this set in motion, following the causal links
- preceded Friedman awarded the Nobel Memorial Prize in Economic Sciences 1976 The 1970s crisis increased the standing of monetarist critiques.
- triggered The Volcker shock 1979 High inflation created the conditions for Volcker severe anti-inflation policy.
- enabled New Keynesian economics answers the market-clearing critique 1991 The crisis forced Keynesian economics to rebuild itself with stronger microfoundations.
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Linked events (5)
- this preceded Friedman awarded the Nobel Memorial Prize in Economic Sciences
- this triggered The Volcker shock
- this enabled New Keynesian economics answers the market-clearing critique
- The collapse of the Bretton Woods exchange system enabled this
- Friedman and Schwartz's A Monetary History of the United States preceded this