The 1973 Oil Shock That Redefined Central Banking

In this episode, Lucas and Luna revisit the 1973 oil embargo and its devastating economic consequences — not just the gas lines and stagflation, but the lesser-known story of how central banks were forced to abandon their traditional focus on interest rates and embrace money supply targets. They focus on the specific decision by then-Fed Chair Arthur Burns to loosen policy despite soaring inflation, a move that shaped monetary thinking for a generation. The hosts unpack the data: oil prices quadrupling, US inflation hitting 11 percent, and the Fed's policy rate staying negative in real terms for months. They also explore how Germany's Bundesbank took the opposite path and emerged with stronger credibility. A sharp, concrete look at how a supply shock broke the old economic consensus. #1973OilCrisis #ArthurBurns #Stagflation #OPECEmbargo #CentralBanking #MonetaryPolicy #FedHistory #Bundesbank #Inflation #OilShock #SupplyShock #NixonPriceControls #EconomicHistory #Economics #FexingoBusiness #BusinessPodcast #FexingoEconomics #Monetarism Keep every episode free: buymeacoffee.com/fexingo