In the 1970s, during my graduation days, together with my colleagues for the first time, attempted to analyze the distribution of inflation in London. With the 1973 Arab-Israeli war, the global economic growth had quadrupled the price of oil, causing the price of commodities to fall.
It was then that UK was forced to introduce for a period the three days working week; to experience the financial market performance that was terrible and with the wage price spiral, that produced an inflationary and slow growth stagnated decade. Something I thought will never come again in my life time.
Now five decades later, in 2020 with country yet to comeout of the COVID19 pandemic, there is a fear that Sri Lanka in the post-Corona scenario, would face the UK experience in the early 1970s, of persistent high inflation combined with high unemployment and stagnant demand in country’s economy.