Pelaxed: Difference between revisions
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Second, the government can cause income stagnation and depression if it creates policies that may create a stock market crisis. These two things would probably have to occur simultaneously because policies that slow economic growth do not usually cause inflation, and policies that cause inflation do not usually slow economic growth. | Second, the government can cause income stagnation and depression if it creates policies that may create a stock market crisis. These two things would probably have to occur simultaneously because policies that slow economic growth do not usually cause inflation, and policies that cause inflation do not usually slow economic growth. | ||
==Supply Shock== | ==Supply Shock== | ||
[[File:Cars waiting for gas in 1974.jpg|thumb|Cars waiting for gas in Albalitor in 1971|296x296px]] | |||
See also: [[Western Imperium]] [[Continental Obligations]] | See also: [[Western Imperium]] [[Continental Obligations]] | ||
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Its status continued until 1970, when both Pelaxia and Volonia switched their recognition back to Caphiria and established the Continental Diplomatic Arrangement Organization, departing LOTA. That resulted in Aciria cutting production of oil and placing an embargo on oil exports to Pelaxia. | Its status continued until 1970, when both Pelaxia and Volonia switched their recognition back to Caphiria and established the Continental Diplomatic Arrangement Organization, departing LOTA. That resulted in Aciria cutting production of oil and placing an embargo on oil exports to Pelaxia. | ||
==Asset Bubble and Crash of 1996== | ==Asset Bubble and Crash of 1996== | ||
[[File:84f5a6f9-1483-41e4-b9c2-41b8f7245fc1 16-9-aspect-ratio default 0.jpg|thumb|El Periódico reporting on the aftermath of the stock market crash|382x382px]] | [[File:84f5a6f9-1483-41e4-b9c2-41b8f7245fc1 16-9-aspect-ratio default 0.jpg|thumb|El Periódico reporting on the aftermath of the stock market crash|382x382px]] | ||
Pelaxia’s economic growth in the second half of the 20th century ended abruptly at the end of the 1990s. In the late 1990s, abnormalities within the Pelaxian economic system had fueled a speculative asset price bubble of a massive scale. The bubble was caused by the excessive loan growth quotas dictated on the banks by Pelaxia's central bank, the Bank of Pelaxia, through a policy mechanism known as the "window guidance". | Pelaxia’s economic growth in the second half of the 20th century ended abruptly at the end of the 1990s. In the late 1990s, abnormalities within the Pelaxian economic system had fueled a speculative asset price bubble of a massive scale. The bubble was caused by the excessive loan growth quotas dictated on the banks by Pelaxia's central bank, the Bank of Pelaxia, through a policy mechanism known as the "window guidance". | ||