The Great Inflation: A Historical Overview and Lessons Learned
All inflation isn't bad—a moderate amount can signal a healthy economy. But high inflation, such as that during the Great Inflation, can lead to a vicious cycle where expectations of higher inflation lead to further increases in the price level.
The Great Inflation, which started in the mid-1960s, lasted for almost two decades and only began to dissipate in the early 1980s. Inflation ticked up throughout the 1970s until the Fed, under Chairman Paul Volcker, took drastic measures to promote greater price stability.
Read this Page One Economics® issue to find out the history of the Great Inflation: what caused it, how tough (and painful) monetary policy brought it to an end, and two key lessons learned that remain relevant today.
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