Procrustes Stretched
"intuition and imagination and intelligence"
You uh... you DO realize that there was nothing huge in the 90 recession right... Inflation in the 70s was out of control because of the Keynesian policies of the late 60s and early 70s...
And sourcing Reich... Really? How much tall thinking can one expect from a midget?
Reich is a smart man and reasonable man. Look at how he gives credit to Reagan for things in his argument. He is not a stupid tool like some here who think ideology is a foundation for argument.
btw, concerning Bob Reich, I did NOT give him my vote for Governor in the Massachusetts Democratic primary.
methinks you have a poor understanding of what exactly inflation si and what causes it. that happens to people who are poorly educated or worse partly educated, in a given subject... so no biggie. keep learning.
A fundamental concept in inflation analysis is the relationship between inflation and unemployment, called the Phillips curve. This model suggests that there is a trade-off between price stability and employment. Therefore, some level of inflation could be considered desirable in order to minimize unemployment. The Phillips curve model described the U.S. experience well in the 1960s but failed to describe the combination of rising inflation and economic stagnation (sometimes referred to as stagflation) experienced in the 1970s.
Thus, modern macroeconomics describes inflation using a Phillips curve that shifts (so the trade-off between inflation and unemployment changes) because of such matters as supply shocks and inflation becoming built into the normal workings of the economy. The former refers to such events as the oil shocks of the 1970s, while the latter refers to the price/wage spiral and inflationary expectations implying that the economy "normally" suffers from inflation. Thus, the Phillips curve represents only the demand-pull component of the triangle model.
Under the Bretton Woods agreement, most countries around the world had currencies that were fixed to the US dollar. This limited inflation in those countries, but also exposed them to the danger of speculative attacks. After the Bretton Woods agreement broke down in the early 1970s, countries gradually turned to floating exchange rates. However, in the later part of the 20th century, some countries reverted to a fixed exchange rate as part of an attempt to control inflation. This policy of using a fixed exchange rate to control inflation has been used in many countries in South America. For instance, Argentina (1991-2002), Bolivia, Brazil, Chile.
wikipedia.org/wiki/Inflation
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