The Financial Times had a good piece about the current state of the global economy and the likeness of the stagflation of the 1970’s. Using that article and other sources I have attempted to differentiate between what was happening then and the current situation with the war in the Ukraine. With oil still having an impact in an economy today this could be the catalyst needed for more greener technologies but this is not going to help in the short-term. Therefore, for global oil prices to stabilise there needs to be an increase in the output of OPEC countries and the likes of Venezuela which could add 400,000 bpd to oil output – the US has been in talks with President Maduro. However, there is a dilemma here in that you may reduce oil prices by getting Venezuela to increase production but you are also assisting an authoritarian regime that is closely linked with Russia.
Sign up to elearneconomics for multiple choice test questions (many with coloured diagrams and models) and the reasoned answers on Inflation. Immediate feedback and tracked results allow students to identify areas of strength and weakness vital for student-centred learning and understanding.