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Energy Shocks and Stagflation
Why supply shocks can raise prices and kill jobs at once—and why that puzzle reshaped macro policy.
Oil shocks in the 1970s broke simple Phillips-curve intuitions: inflation rose while unemployment stayed high. Policymakers learned that stimulating demand could worsen inflation without restoring growth.
Modern echoes
Geopolitics, climate transitions, and pandemic bottlenecks revived supply-side inflation debates. Monetary and fiscal leaders must judge what is transient versus persistent.
Link to the glossary
See stagflation, inflation, and monetary policy entries for definitions; this topic ties the narrative together.