Kate Davis Reaganomics is a reference to U.S. president Ronald Reagan's economic policies between 1981 and 1989 - undue tax burden -excessive government regulation -massive social spending programs hampered growth.
Goals of Reaganomics - increase investment & saving - stimulate economic growth -successfully balance the national budget -reduce interest rates & inflation -restore healthy financial markets.
The Federal Reserve Board believed that the tax cut would re-ignite inflation and raise interest rates. Reaganomics resulted in a deep recession in 1981 and 1982. The high interest rates caused the value of the dollar to rise on the international exchange market. This caused American goods to be more expensive abroad The national debt tripled from one to three trillion dollars during the Reagan's term.
Zoe Cobb History
Julia Galbraith Stagflation: Occurs when the government or central banks expand the mo at the same time they constrain supply
In the late 1970's-1980's, the post-World War II economic boom began to develop, due to increased international competition, the expense of the Vietnam War, and the decline of manufacturing jobs.
Unemployment rates rose, while a combination of price increases and wage stagnation led to a period of economic doldrums known as stagflation. President Nixon tried to alleviate these problems by devaluing the dollar and declaring wage.
The crisis was compounded when oil-rich nations in the Middle East declared an embargo against the United States in retaliation for its support of Israel. The oil embargo had a lasting effect on energy prices.
Brooke Adkisson Crash of 1988: Brooke Adkisson Crash of 1988:SAN FRANCISCO (MarketWatch) — Twenty-five years ago, on Oct. 19,1987, the Dow Jones Industrial Average plunged almost 23%, its largest one-day percentage-point drop ever. While the crash didn’t usher in another Great Depression, it did introduce investors to a new era of stock-market volatility. Even though market controls, such as circuit breakers introduced after the “flash crash” of May 6, 2010, are designed to avoid another crash like Black Monday, markets are still susceptible to severe and prolonged downturns. fun fact:n finance, Black Monday refers to Monday, October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time.