I keep seeing references to the 1970′s stagnation that reflect a consensus belief that real GDP growth in the 1970s was significantly lower in the 1970s than in the 1980s.
But this is contrary to the data:
REAL GDP GROWTH( % )
1970…0.21……..1980…-0.04
1971….3.29……..1981….2.58
1972….5.25……..1982…-1.91
1973…..5,64…….1983….4.63
1974….-0.52…….1984….7.26
1975….-0.20…….1985…..4.24
1976….5.34………1986…..3.51
1977…..4.61………1987…..3.46
1978…..5.56………1988….4.20
1979……3.18………1979….3.68
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AVERAGE
1970s….3.23%………..1980s….3.16%
Yes, the 1970s had a serious problem with inflation, but that does not negate the fact that real GDP growth was actually higher in the 1970s than in the 1980s. We need a different term to correctly describe the 1970s rather than stagnation.
So why do knowledgeable economist like Krugman not recognize that applying the stagnation term to the 1970s creates a false impression about our economic history.