The 1973 Oil Embargo and the Birth of Stagflation

In this episode, Lucas and Luna explore the 1973 oil embargo and its lasting economic impact. They focus on the specific trigger: the Yom Kippur War and OPEC's subsequent cut in production, which caused oil prices to quadruple within months. The hosts trace how this shock led to the term 'stagflation' — a combination of high inflation and stagnant growth that defied the prevailing Phillips Curve model. They discuss the effect on U.S. monetary policy, the rise of conservation measures like the 55 mph speed limit, and how the crisis reshaped energy policy for decades. Lucas highlights the role of the Federal Reserve under Arthur Burns, who failed to act decisively against inflation until Paul Volcker's appointment in 1979. Luna notes the human element: the gas lines and rationing that disrupted daily life. The episode concludes by drawing parallels to modern energy price shocks and supply-side disruptions. #1973OilEmbargo #Stagflation #OPEC #YomKippurWar #ArthurBurns #PaulVolcker #PhillipsCurve #FederalReserve #Inflation #EnergyCrisis #GasLines #Rationing #USMonetaryPolicy #SupplyShock #EconomicHistory #Economics #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo