Many economists believe that the extremely high inflation rates of 1973-74 were driven primarily by

The 1973 oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries proclaimed an oil embargo. The embargo was targeted at nations perceived as supporting Israel during the Yom Kippur War.[1] The initial nations targeted were Canada, Japan, the Netherlands, the United Kingdom and the United States with the embargo also later extended to Portugal, Rhodesia and South Africa. By the end of the embargo in March 1974,[2] the price of oil had risen from US$3 per barrel to nearly $12 globally; US prices were significantly higher. The embargo caused an oil crisis, or "shock", with many short- and long-term effects on global politics and the global economy.[3] It was later called the "first oil shock", followed by the 1979 oil crisis, termed the "second oil shock."

There are several reasons why the recession that took place between 1973 and 1975 affected not just the United States, but also the rest of the world. In the case of the United States, one of the first causes was the negative effect that the whole Nixon scandal had, and which caused a fall of the Bretton Woods system. Also, a rise in competition with other industrialized countries, like Japan, Great Britain, and France, made American-made products less competitive, which drove sales down. Finally, the stock market crash of 1973-74, all became reasons that drove forward this recession, the biggest and most dangerous after the Great Depression, and only overcome by the 2008-09 recession. But probably what nailed the recession, which was caused by hiperinflation and unemployment, was the 1973 Oil Crisis that was generated through the steep increase of oil prices by producing countries, like the Arab nations, after an embargo they had set on the product a year before. This increase in prices affected many countries, but it targeted mostly countries who were pro-Israel.