What this lesson teaches
I can judge how oil crises, protectionism and debt crises hurt the global economy from the 1970s.
Syllabus 9174, Paper 1, Theme II, Learning Outcomes. evaluate the challenges that affected the global economy over time
Make a guess
Which challenge to the post-war economy do you think was most serious?
- Protectionism, because it alone ended the post-war boom.
- Whichever lasted longest, since length matters more than the other tests.
- It depends on your criteria: breadth, depth, length and links.
Show the answer
It depends on your criteria: breadth, depth, length and links.
The oil crises reached furthest and triggered the others; the debt crises did the deepest regional damage.
To judge which challenge mattered most, set criteria: breadth, depth, length and links to the other challenges.
Questions may ask which challenge was most serious, or whether one challenge caused the others. Set clear criteria before you judge.
The oil crises had the widest reach. They hit almost every economy and ended the Golden Age. They also set off the other challenges, through petrodollars and high interest rates.
The debt crises did the deepest damage to some regions. They cost Latin America a decade of growth and threatened major Western banks. But industrial economies recovered from the mid-1980s.
Protectionism was the longest-lasting challenge but the least dramatic. It distorted trade for two decades without stopping trade growth.
A good judgement explains how the challenges were linked. It can then argue which was the root cause and which did the most harm.
- Criteria
- Breadth, depth, length and links.
- Oil crises
- Widest reach; set off other challenges.
- Debt crises
- Deepest damage in Latin America and Africa.
Worked example: Applying criteria
Which challenge was the most serious?
- Breadth: the oil crises, which hit nearly every country.
- Depth: the debt crises, which caused a lost decade.
- Length: protectionism, which lasted two decades.
- Judgement: the oil crises, because they helped cause the other two.
Watch out for this
The most serious challenge is simply the one that lasted longest.
Length is one criterion. You also need to weigh breadth, depth and links to the other challenges.
Check your understanding
Which argument best supports the oil crises as the most serious challenge?
- They were caused by protectionism.
- They mainly hit the Middle East and spared the industrial economies.
- They hit nearly every economy and set off the debt crisis.
Show the answer
They hit nearly every economy and set off the debt crisis.
Right. Breadth and causal links make a strong case.