ABSTRACT
The quadrupling of oil prices in November 1973 had significant effects on the world economy, as oil was not only used as a prime energy source but also as a primary material input for countless products. The shock manifested itself in worldwide stagflation, in balance of payments deficits for most non-OPEC countries, and in deterioration in the terms of trade of the oil importing countries. The second oil crisis in 1979 hampered the recovering world economy, causing the growth rate to decline and the inflation rate to rise again.
