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    Causes of Stagflation

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    I have answered the first part of the question but am having problems with the second part of it, I would really appreciate any help that you could give me.

    1.(Stagflation) What were some of the causes of the stagflations of 1973 and 1979? In what ways were these episodes of stagflation different from the Great Depression of the 1930's?

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    During the Depression, we saw declines in price levels as unemployment increased. This is a typical state of affairs: as people lose their jobs, demand declines and shifts the demand curve inward. This results in a lower level of output as well as lower price levels. However, during times of stagflation, we see an inward shift in the supply curve along with a decline in demand. This causes price levels to rise even ...

    Solution Summary

    Comparison of the stagflation events of 1973 and 1979 and the Great Depression