1) The "Nixon Shock" preceded, and was THE cause of the collapse of Bretton Woods with the "de-peg" of gold. If you do not think/consider effects beyond the shores of the US you will never understand how the economy works. 2) As SpecterX pointed, there were other domestic policies and events that ultimately were proven detrimental to the desired outcome of Nixons actions. 3) The "Volker Shock" during the Reagan era was about Domestic interest rates. The "shock" in particular was Fed Funds, which affects nearly if not all interest rates. Again you must think beyond the US shores as well. It is Volker who is (rightfully) credited with ending the inflationary period.
1. What were the effects beyond U.S. shores based on the Bretton Woods collapse, etc.? If it was that other currencies appreciated versus the dollar I can understand that would lead to rising prices in the U.S. Is that what happened? If not, what? 2. Other domestic policies - how did those impact inflation? If they didn't cause the printing of money, and didn't shrink the economy, how did they increase inflation? 3. Volker, yes, I remember reading he dramatically increased interest rates, that brought about a recession, but killed the inflation. But, again, why was there so much inflation in the first place? Thanks!!!
This blurb is good. Perhaps the course is good too, IDK. https://study.com/academy/lesson/nixon-shock-definition-effects.html
Maybe, but it is important to realize that there is a difference between Cost-Push and Demand-Pull inflation. You're describing the latter.
Dollar weakness. Milton Friedman said, "inflation is a monetary phenomenon." From 1965 to 1980, USD was decimated vs the Deutschmark and Yen.
Well the dollar being weak, in some cases decimated, from 1965 to 1980 would explain a whole lot of it!
So, let me then ask the next question. If it was the dollar depreciating against world currencies in the 70s (along with the old shock) that led to all the inflation, when the dollar quit depreciating, and oil prices stabilized (and actually came down), wouldn't the inflation naturally stop on its own? Why did Volker have to drive interest rates sky high, causing a recession, to kill the inflation?
It actually is all about oil. The oil shock drove prices up across most consumer goods (inputs, manufacturing, and logistics) and created an anchoring effect, where consumers began to expect higher prices.
So, if that's the case, why did Volker have to drive us into a recession to stop inflation? Why wouldn't the inflation just stop, eventually, when oil stopped going up?