1960 - 1995

Boom, Bust, and Boom Again

The Golden Years of the 1960s

US Economy Grows 2%-2.5% per Year on Average

• 6.1% in 1962

• 4.4% in 1963

• 5.8% in 1964

• 6.4% in 1965

• 6.5% in 1966

Almost an Entire Decade

Other Economic Factors in the 60s

• Unemployment

• Inflation

Dismal Decade of the 1970s

• Recession– December 1969 – November 1970– November 1973 – March 1975

– January 1980 – June 1980– July 1981 – November 1982

Unemployment through the Recessions

Inflation through the Recessions

Price Controls

Inflation after Price Control

News vs. Economists

Globalization

OPEC Oil Embargo

Results of Oil Embargo

Back to the Story

Imports

Imports

Worst ProblemProductivity Slowdown

Productivity

Productivity

Productivity• 1960-1964—productivity growth about 3%

per year

• 1965-1969—productivity growth slowed to about 2.4% per year

• 1970-1974—productivity growth slowed to about 2.0% per year

• This continued down until the mid-1980s and remained low until at least the 1990s

Productivity

• .

Why Did All of This Happen?

What went wrong in the 1970s

• Guns and Butter Story

Here is another one

What went wrong in the 1970s

• Guns and butter story• Oil Prices did it story

What went wrong in the 1970s

• Guns and butter story• Oil Prices did it story• Stop-Go Monetary Policy Story

What went wrong in the 1970s

What went wrong in the 1970s

What went wrong in the 1970s

New Challenges for the 1980s

New Challenges for the 1980s

New Challenges for the 1980s

New Challenges for the 1980s

New Challenges for the 1980s and Beyond

Ronald Reagan

Budget Deficits

Budget Deficits

Debt / GDP

Worries in the mid-1980s

Globalization Continued to be a Fear