When Iraq then invaded Iran in 1980, the situation deteriorated even further. The price of oil also rose, but very briefly, when Iraq attacked Kuwait in 1990. Figure 2. Real oil price USD/barrel 150  150  Iran-Iraq War  125  125  100  100 Revolution in Iran  Gulf War  75  75  50  50  25  Iraqi invasion of Kuwait  Oil embargo in connection with the Yom Kippur War 0 1965  1970  1975  1980  1985  1990  25  0 1995  Note. Real prices have been computed with the CPI in United States. Souces: U.S. Bureau of Labor Statistics (BLS), U.S. Energy Information Administration and the Riksbank  19 Åsbrink (2019). 8 [14]  However, the policy that was conducted during this period also played a significant role. It became, for various reasons, on average too expansionary or, as it is called, too accommodating. In economic textbooks, this period of high and longterm inflation in the world is known as ‘The Great Inflation’. This usually refers to the period 1965-1982, where ‘the Volcker disinflation’, the tight monetary policy conducted by then head of the Federal Reserve Paul Volcker to curb inflation in the United States, is regarded as the endpoint.20 For Sweden, it is more appropriate to refer to a period that both starts and ends about ten years later. The Swedish economy was wrestling with serious economic problems during this period.
The European panel's responses are presented at https://www.igmchicago.org/surveys/ukraine/ and the American at https://www.igmchicago.org/surveys/ukraine-2/. The results are summarised by Vaitilingam (2022). 10 [14]  For a monetary policy decision-maker, supply shocks are more difficult to deal with than demand shocks. If inflation rises because demand has risen unexpectedly, the remedy is simple: The central bank raises the policy rate and thus suppresses both inflation and demand, thereby reducing the risk of the economy overheating. But if inflation rises as a result of a negative supply shock, the problem is more complex. If most people assume that the effect on inflation is transitory, the problem does not need to be so great. The central bank can then simply wait until inflation falls back again. However, one risk that is always present is that price impulses spread to other prices and start to affect economic agents’ expectations. These may then expect inflation to remain high, or even rise further. The signs of such second-round effects have now begun to increase in many economies. This creates a tricky balancing act for monetary policy: At the same time as one wants to maintain confidence in the inflation target and prevent inflation from becoming entrenched at a high level, one wants to avoid pursuing a policy so tight that the economy enters a recession. As we saw, this was what happened after the First World War, although the motive then was to return to the previous price level rather than bring down inflation.