For the G-7 countries, the economic damage caused by the two oil crises in the 1970s led to high inflation for consumers and negative fallouts for people’s purchasing power. This situation triggered a sharp contraction in both household consumption expenditures and the real sector’s investment expenditures. Therefore, it dragged the world’s leading economies into a heavy recession.
As unemployment began to grow, the world’s leading economies experienced a heavy recession in an environment of high inflation and high unemployment. This is how the concept of “stagflation” was added to the literature on economics.
The coronavirus pandemic brought on anomalies and difficulties for the global economy and trade. It caused significant economic contraction worldwide, including for the leading economies, with serious contractions in production and consumption at the beginning of the pandemic….