The 1973 oil crisis triggered a resounding defeat of Keynesian economics

Evidence

As the world emerged from the oil crisis of 1973, the defeat of Keynesian economics (and the corresponding dominance of the neoclassical model) was resounding on both sides of the Atlantic. The story is more or less familiar. As national and international controls over the flow of financial capital were gradually lifted, financial activities expanded exponentially: in the United States, the total financial sector share of gross domestic product increased at a faster rate between 1980 and 2007 (13 basis points of GDP per annum) than it had done in the prior thirty years (7 basis points of GDP per annum) and more than doubled between 1970 (4% of GDP) and 2007 (9% of GDP). — Aris Komporozos-Athanasiou, Speculative Communities, 107

Categorization

• XREF: Places the 1973-inflection narrative in the reader’s broader financialization history alongside other sources on the post-Bretton Woods era. — connects to: The global Keynesian stimulus push lasted barely a year before backsliding — Mark Blyth, Austerity: The History of a Dangerous…, 160; Key Austrian works failed commercially while Keynesianism dominated economics — Mark Blyth, Austerity: The History of a Dangerous…, 384; Loose monetary policy plus oil shocks triggered the 1973 economic crisis — David Harvey, The Condition of Postmodernity: An…, 861 (+3 more)

Broader Connections

• 1970s stagflation discredited Keynesian demand management and empowered monetarism #expands (0.92) — Donald MacKenzie, An Engine, Not a Camera, 47
• Loose monetary policy plus oil shocks triggered the 1973 economic crisis #qualifies (0.85) — David Harvey, The Condition of Postmodernity, 861
• Keynesian dominance gave way to Friedman’s influence in economics #corroborates (0.80) — Angus Burgin, The Great Persuasion, 392