Current Macroeconomic Problems and Policies

Abstract

The combination of high unemployment and high inflation that became established in the later 1970s began to appear in the later 1960s, when inflation started to increase. During the period of higher inflation in the first half of the 1970s, unemployment rates also remained well above the levels that had generally prevailed since World War Two. Table 2.1 illustrates the deterioration of the macroeconomic situation in the OECD countries (the developed countries of Europe and North America, together with Japan, Australia and New Zealand), as indicated by the rate of increase in consumer prices and by the recorded unemployment rates for the group.¹