The Economy in the 1970’s & 1980’s

The Economy in the 1970’s & 1980’s

Introduction

This work is a general view of the most important changes that characterized the economy of the 1970’s and 1980’s, we can find a short analysis of the economic situation of the world.

This analysis, show the economical changes that affected the American economy, during the 1970’s. For example, this decade was characterized by an economic depression, not only the United States, also in other countries of the world, including Mexico and other countries of Latin America.

Also we can find the causes of the biggest economical problems, and its consequences. The seventies were marked by a strong energy crisis that came a phenomenon in which inflation and unemployment increased.

In the U.S. industrial Sector cities were impacted by the fall of manufacturing demand, as thousand of factories and plants closed due to their high salary costs. These results in a U.S. balance chronic fall trade. On the other hand East Asian Tigers conformed by China, Malaysia, South Korea, Thailand and Taiwan experimented significantly high World trade rates.

In other affairs, these works show the political and economic changes of 1980’s decade, in which military governments and authoritarian regimens culminated. It’s important to say that 1980’s recession continued onto the early 1990’s.

 

 

Investigation

In 1970’s

It can be said that the 1970’s was a bad period for the western and American economies since their economic growth rates reduced lower than previous decade.

In the case oh the American economy, this problem can be explained by the funding spent in the Vietnam War. Also this period was affected by the oil shocks of 1973 and 1979 resulting in high inflation rates all over the world.

This phenomenon of soaring oil prices finally reflected in inflationary results. The average inflation rate hit about 6 percent, reaching to 13.3 percent in 1979.

This period was affected as well by an unemployment increasing. Both of these problems lead to double-digit interest rates above 12% per year.

In other part of the world, particularly in the case of Soviet style economies began showing signs of high inflation and unemployment rates as well. Although the Soviet oil exports increased but the agricultural sector was seriously affected in these economies.

So, the seventies were marked by the energy crisis which peaked in 1973 and 1979. This oil crisis lead to gasoline limits in many countries, and a high oil western dependence on the middle East. The U.S. made use of its own oil reserves.

Finally, an ecological awareness rose substantially and the age of modernism was temporally paused.

 

  In 1980’s

This was a decade of change characterized by political and economic decentralization in countries with mixed economies. Political events in the 1980 are culminated in the downfall of the military juntas of Brazil, Chile, Uruguay and Argentina.

In many third world countries, the decade was characterized by debt crisis that began in 1982, with Mexico leading the developing world in poor economic health throughout the decade. Other countries like India began to experiment as free market economies with good results.

The United States lived the “Reagan Years” from 1981 to 1989 characterized by the rise of conservatism. In the same way the 1980’s economic policy of  «Reaganomics” gave more power to corporate businesses with worst conditions to the country’s working – class.

As it was mentioned before Mexico declared in 1982 that it cannot pay back, its debts arising in this way severe adjustment programs, driven by World Bank and the International Monetary Fund.

As a result, Mexican and other third world immigration into the U.S. grew in the 1980’s. In the United States the Dow Jones Industrial average passed 2000 point milestone early in 1987, but started to slow and decline in the late 1980’s.

Petroleum prices collapse below $10 per barrel by mid 1986 devastating oil producing nations such as Mexico and Venezuela. The U.S. Midwest farm experimented a crisis from 1981 to 1985 affected the Midwest U.S. and Southeast U.S. regions.

Finally, Stock markets across the world crash on Black Monday, October 19th. 1987. Late 1980’s recession, continued onto the early 1990’s. It wasn’t as severe like the early 1980’s recession that began in the mid 1970’s.

Conclusion

According to my investigation evidence, the 1970’s decade was the worst decade of the western American economic performance since 1930’s. In this decade the American economy was discomposed as a result of the domestic spending and funding for the Vietnam War. This period represent for the American people and for other countries was relevant by the increase of the inflation ad the unemployment, and also by the strong energy crisis.

In the 1980’s decade the world knew some political and economical changes, that was characterized by culminated in the toppling of military governments and authoritarian regimens.

In this era or economical changes, East Asian countries like China, Malaysia, Korea, Thailand and Taiwan began to compete in the global economic world.

Opinion

In my opinion I think that the Vietnam’s War cost for the United States was the main cause of its worst economic problems that this country had during the 1970’s. This situation affected not only to the Americans, also affected the developing countries.

In these situations we can find the big influence that the U.S.A. economy had in the rest of the world. Also, we can note that the political changes of the 1980’s have an influence of the economic crisis that was characterized of American countries.

We can think that the American economy crisis of 1980’s was the reason why some East Asian countries toke advantage to compete like a new giants rivals in the global economic world. In developing countries like Mexico, the 1980’s began a big economic crisis that obligated to these countries to declared not be able to pay its debts.

Sources

   Http://www.inthe70s.com

Http://www.inthe80s.com

Http://www.wikipedia.org

– Problemas Económicos

Anda Gutiérrez, Cuauhtémoc

IPN

– Webster’s Dictionary

Gage Alle, John

Harbor House Publishers Inc.

– Muy Interesante

Editorial Televisa Internacional

January 2007

 

 

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