Bernanke: Country won’t spill into 1970s-like oil shocks

WASHINGTON


Back then, the economy suffered from a dangerous combination of stubborn inflation and stagnant growth. There are fears today that the U.S. may be heading in that direction again.

“We see little indication today of the beginnings of a 1970s-style wage-price spiral, in which wages and prices chased each other ever upward,” Bernanke said at Harvard.

Then, as now, the U.S. endured a serious oil price shock, sharply rising prices for food and other commodities and subpar economic growth, he said.

Today’s economy, however, is more flexible in responding to difficulties and the country is more energy efficient than a generation ago, Bernanke said.

USA Today