Causes Of The Great Inflation In The United States
During 1970s, the economy in the United States was quite bad. The Great Inflation began in late 1972, and ended in early 1980s. According to Gregory Bresiger (Bresiger, 1994)
“The great inflation was blamed on oil prices, currency speculators, greedy businessmen and avaricious union leaders. However, it is clear that monetary policies, which financed huge budget deficits and were supported by political leaders, were the cause.” Except these facts, there was also a reason why high inflation happened, the easy-money policies of the American central bank, which were at first designed to generate full employment, later reversed its policies, raising interest rates to 20 percent, caused interest rates skyrocketing.
“The great inflation was blamed on oil prices, currency speculators, greedy businessmen and avaricious union leaders. However, it is clear that monetary policies, which financed huge budget deficits and were supported by political leaders, were the cause.” Except these facts, there was also a reason why high inflation happened, the easy-money policies of the American central bank, which were at first designed to generate full employment, later reversed its policies, raising interest rates to 20 percent, caused interest rates skyrocketing.