Kōrero: Spending in the economy

Stagflation

In response to a rapid rise in the price of oil in 1973 the government increased its spending. (Because of inflation, the amount spent in real terms – shown above – did not grow greatly.) The spending was partly an attempt to prevent business failure and unemployment, but the government also aimed to reduce New Zealand's dependence on imported oil through large energy projects. Despite increased spending, unemployment rose, particularly among young people, Māori, and Pacific Islanders. At the same time inflation rose in leaps and bounds. Another rise in the price of oil in 1978 prompted such high inflation that the government imposed a year-long price and wages freeze in June 1982. Although this temporarily brought the rate of inflation down, it could not be sustained.

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Te Ara - The Encyclopedia of New Zealand

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Source: Statistics New Zealand

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Te tuhi tohutoro mō tēnei whārangi:

Paul Dalziel, 'Spending in the economy - Spending in difficult times', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/interactive/21631/stagflation (accessed 28 February 2020)

He kōrero nā Paul Dalziel, i tāngia i te 11 Mar 2010, updated 16 Sep 2016