Summary of The Great Inflation and Its Aftermath

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Recommendation

Recessionary times have led many people to re-evaluate their long-held beliefs about the financial system. His history-based economic analysis makes journalist Robert Samuelson’s fresh investigation of the insidious effects of inflation especially interesting. He covers the advent of inflation in the U.S. in the 1960s, and explains how it changed the nation’s economic thought and vision. Like a mutated gene, inflation assumed a life of its own and spawned the “new economy.” Samuelson presents a provocative, if debatable, argument about economics and prosperity. getAbstract recommends this detailed, advanced economics report and assures readers who stick with it that it will reward them with deeper understanding and fresh insights.

About the Author

Robert J. Samuelson is a Newsweek and Washington Post columnist. He wrote The Good Life and Its Discontents and Untruth, a collection of his columns.

 

Summary

The Inflationary Cycle

Almost 50 years have elapsed since the United States experienced the start of an inflation-dominated economic cycle. From 1960 to 1979, U.S. inflation grew from 1.4% to 13.3%. By 2001, it had fallen to 1.6%, almost its 1960 level. The “Great Inflation” from the mid-1960s to the early 1980s could be considered the U.S.’s “greatest domestic policy blunder” since the end of World War II. These decades of inflation had a huge impact on prices, politics, business, employer-employee relations, global trade and the evolution of American society.

People take price stability for granted, but when prices increased in the 1970s, food and housing costs became uncertain, and savings declined. Worse, Americans did not know who could regain control of the situation. Ronald Reagan won the 1980 U.S. presidential election due to public discontent over “double-digit inflation,” which caused four recessions: from 1969 to 1970, 1973 to 1975, 1980, and 1981 to 1982. Late in 1982, inflation rose again, unemployment hit 10.8% and the U.S. standard of living fell. The Dow Jones Industrial Average “was no higher in 1982 than in 1965.” The Great Inflation was an unintended...


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