INVESTMENT, GROWTH, AND INSTABILITY: STAGFLATION AND THE CORPORATE COUNTERATTACK, 1973-1988
The recovery from the recession of December 1969-November 1970 at first appeared normal, but it was soon marked by events that clashed with the usual profile of growth and prosperity. In 1971 a crisis broke out in the nation’s foreign economic relations, culminating in the devaluation of the dollar, an abrupt move away from free trade through a surtax on imports, and controls placed on prices and wages for the first time since 1951. Early in 1973 the inflation rate began to accelerate; then the Organization of Petroleum Exporting Countries (OPEC) succeeded in quadrupling the price of oil during the winter of 1973-74. After thirty-six months the recovery stalled, and the economy fell into what by some measures was the worst recession since the 1930s (Table 6.1).