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Time Machine: Volcker Shock


Vox's Dylan Matthews joins Matt and Dara for another step into Weeds Time Machine: a visit to the past to review some now-forgotten chapter in policy history. This week, it's a return to the late 1970s and a reexamination of "Volcker shock": an attempt by Fed Chairman Paul Volcker to cope with rising inflation, and the myriad consequences of his efforts. Our hosts discuss the oil crisis, stagflation, the curious relationship between central banking and fiscal policy, and give some much-needed reanalysis to this crucial and topsy-turvy time in American history.

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Charts: Unemployment in the 1970s & Inflation in the 1970s

"America's Peacetime Inflation: The 1970s" by J. Bradford De Long in Reducing Inflation: Motivation and Strategy, eds. Christina D. Romer and David H. Romer (U. Chicago; 1997)

"Commentary" [on 1970s inflation] by Christina D. Romer (Federal Reserve Bank of St. Louis Review; 2005)

Keeping At It: The Quest for Sound Money and Good Government by Paul Volcker (Public Affairs; 2018)

"Other People's Blood" by Tim Barker (n+1; 2019)

"Paul Volcker Was a Hero of the Ruling Class" by Doug Henwood (Jacobin; 2019)

The Economists' Hour: False Prophets, Free Markets, and the Fracture of Society by Binyamin Appelbaum (Little, Brown; 2019)

"What really drives inflation" [on "Regulation Q"] by Itamar Drechsler, Alexi Savov, Philipp Schnabl (Sept. 11, 2019)

"Paul Volcker's Complicated Latin American Legacy" by Tyler Cowen (Bloomberg; Dec. 10, 2019)

"The Rise of Finance" by Jonathan Levy (Public Books; Nov. 22, 2011)


Matt Yglesias (@mattyglesias), Slowboring.com

Dara Lind (@DLind), Immigration Reporter, ProPublica

Dylan Matthews (@dylanmatt), Senior Correspondent, Vox


Erikk Geannikis (@erikk38), Producer

Ness Smith-Savedoff, Engineer

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