In my first column in this series, I gave Hyman Minsky's explanation of what caused the stagflation of the 1970s—a credit bubble bursting when the economy was absolutely at its peak caused the stagnation, while high wage and oil price rises caused the inflation. I finished with the essence of Milton Friedman's very different explanation: that it was due to the government trying to push the unemployment rate below the natural rate by increasing the money supply too quickly.
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