DHL

Chapter 10 The 80s

Economic and Political Turbulence…

The 70s decade closed with the onset of a global recession that gripped the developed world in the early 80s. Inflationary pressure not seen before (20 percent interest rates in the U.S. in 1980) caused a rethink and a revival of laissez-faire economics with a focus on deregulation, less government intervention and lower taxes. The failed economic policies of the late 70s would take a while to unwind, but the world was ready for change. The “supply-side Reaganomics” response along with the globalization effects discussed in this chapter, drove the federal funds rate down to 6 percent in 1987. Another small but significant example is New Zealand, virtually bankrupt after decades of protectionist ...