This economics textbook is saying stagflation in the very early '70s was caused by LBJ not wanting to raise taxes to pay for Vietnam and Nixon pushing to overstimulate the economy for his re-election in 1972. "In both cases, the United States pursued fiscal and monetary policies that increased overall demand at a time when production was at or near capacity."
https://books.google.com/books?id=a...n production was at or near capacity"&f=false
Then OPEC quadrupled prices in 1973 and nearly tripled them in 1979. And other sources state clearly that this shifted the supply curve inward and led to both increased prices and lower GDP, no mystery at all.
https://books.google.com/books?id=a...n production was at or near capacity"&f=false
Then OPEC quadrupled prices in 1973 and nearly tripled them in 1979. And other sources state clearly that this shifted the supply curve inward and led to both increased prices and lower GDP, no mystery at all.