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Early 1980s Recession. Kaulana La’a, Lehua La’a, Harlee Meyers. What Caused This Recession?. Inflation was still on the rise after the 1973-1975 recession. During this time the economy suffered from stagnation (high unemployment and high inflation)

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Early 1980s recession

Early 1980s Recession

Kaulana La’a, Lehua La’a, Harlee Meyers

What caused this recession
What Caused This Recession?

  • Inflation was still on the rise after the 1973-1975 recession.

    • During this time the economy suffered from stagnation (high unemployment and high inflation)

  • The Federal Reserve attempted to resolve the recession by issuing a contractionary monetary policy

Contractionary monetary policy
Contractionary Monetary Policy

  • Developed to lower the money supply in the economy, which resulted in lower prices and lower inflation rates

  • This policy helped to lower inflation, but it raised the unemployment rate due to the banks and other similar businesses that were suffering from a lack of money in the system.

Who was affected by the recession
Who was affected by the recession?

  • The recession had the biggest impact on financial institutions, such as: banks, and savings/loans associations.

    During Spring of 1983, 30 states had double digit unemployment rates.




How the economy recovered
How The Economy Recovered

  • After the inflation was lowered due to the Contractionary Monetary Policy, the Federal Reserve also lowered interest rates. This caused the economy to be slowly revived, although unemployment remained relatively high for the next few years.


  • In 1980, I was twenty one years old living with my fiance. I had moved out of the house at seventeen to become an independent adult and finish high school, therefore I already had previous experience in being fiscally responsible. In 1980 I had joined the largest non-computerized air travel service in the world, Royal Hawaiian Airways, as a personal service agent. During this time, a monumental movement was changing the way we travel the airways today: the Airline Deregulation Act (also known as the acronym ADA).

Part two
Part two

  • Since 1937, the Civil Aeronautic Board (also known as the acronym CAB) had controlled the pricing of commercial air travel. The CAB regulations had limited routes, security, and even price. This is where the Airline Deregulation Act stepped in. From 1978-1985, the ADA liberated the commercial airlines industry: placing power to name their own price on tickets and create new routes. The airways boomed in economic power, with prices lowering and air travel gaining new heights (pun intended).

Part three
Part Three

  •   As I gained more job experience at Royal Hawaiian Airways, I realized I needed more money. At 1980, the inflation was incredibly high, as was interest rates on banking loans. The idea of a new home or wedding on a beach seemed like a far away place with interest rates up to 14% in 1980; so we waited a few years until the loans were lower and unemployment seemed higher. I eventually did get that Lanikai Beach wedding I wished for since I was 12 in 1981, and bought my very first house a couple years later.

Part four
Part Four

  •   In 2011, my youngest daughters are seniors in high school, my wedding vows were renewed last June; and my home has been paid off. 1980-1983 was a time of great change for me and I am glad that I was able to survive it.


  • http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_kd_zg#ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_kd_zg&scale_y=lin&ind_y=false&rdim=country&idim=country:USA&ifdim=country&tstart=343216800000&tend=469447200000&hl=en&dl=en

  • http://www.google.com/publicdata/explore?ds=k3s92bru78li6_&ctype=l&strail=false&bcs=d&nselm=h&met_y=pcpipch#ctype=l&strail=false&bcs=d&nselm=h&met_y=pcpipch&scale_y=lin&ind_y=false&rdim=country_group&idim=country:US&ifdim=country_group:parent:&tstart=343216800000&tend=500983200000&hl=en&dl=en

  • http://www.onlineschooling.net/history-of-recessions

  • http://247wallst.com/2010/09/09/the-13-worst-recessions-depressions-and-panics-in-american-history/3/

  • http://www.tnr.com/article/politics/the-case-deficit-spending

  • http://www.applet-magic.com/rec1980.htm

  • http://scottgrannis.blogspot.com/2009/09/early-1980s-recession-was-much-worse.html

  • http://withfriendship.com/user/neeraj/early-1980s-recession.php