JANUARY 1980 – NOVEMBER 1982 (22 months)
The 1980s recession can be mostly attributed to the Iranian Revolution which took place in Iran around the year 1979. This revolution caused a sharp increase in the price of oil all around the world, causing the 1979 energy crisis.
The reason for the sharp increase in prices was primarily the new regime of power in Iran. The new regime exported oil at what were not only inconsistent levels, but at a much lower volume. This forced the price of oil up. The United States enacted a tight monetary policy in the States to control inflation, and this led to another recession.
These monetary changes needed to be made not only for the sake of current inflation, but because of the inflation that had carried over from 1973 oil crisis and the 1979 energy crisis. The Federal Reserve, in an effort to control this inflation, changed the monetary policy.
