The Worst of Times, The Best of Times

Writer Jan Sonnergaard and political commentator Niels Krause-Kjær have different views about the 1980s. Sonnergaard finds that the 1980s were the worst of times with the developed world living under the threat of nuclear destruction. Krause-Kjær on the other hand saw a new dawn.

Who is right? Well, in a way, both are. If we look at two economic indicators, the 1980 were a mixed bag:

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Where Krause-Kjær is right is in noting that post-1982, governments made a serious effort to bring down inflation and rates. This wasn’t just a Danish development: We see this in most Western countries. The price, on the other hand, was a permanent high level of unemployment. There were other reasons for the high level of unemployment which had to do with the fundamental imbalances haunting Danish economy until the 1990s, but unemployment was taken as a consequence of economic policy.

It was only in the mid-1990s that economic policy finally broke the spell and we began the 15 or so years of low unemployment. But if you were unlucky, getting stuck in more or less permanent unemployment was easy during the 1980s – in fact easier than in the 1970s.

Now, for a serious discussion I ought to include a host of other indicators: GDP growth, Balance of payments (remember that one?), Public deficit, public debt, etc. But I hope you get the picture.

2 Comments

  1. avatar

    This reminds me of the Phillips curve from economics, the theory of which states that there is a naturally inverse relationship between unemployment and inflation. One will rise when the other drops.

  2. avatar

    Yes and no: If you add the values of inflation and unemployment, it becomes obvious that the value varies considerably over time. And, as noted, a lot of other parametres played a role in economic policy during the 1970s and 1980s.

    I originally collected the data in order to calculate something called the “misery index”.

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