Kuala Lampur, June 25 -- In 1973, the decision by the United States to support the Israeli military in the 1973 Arab-Israeli War (also known as the October War) led to an oil embargo on the US and other countries supporting Israel. Arab Opec nations ceased exports to these countries and began a series of production cuts which led prices of oil to increase four-folds in less than three months, from US$2.90 a barrel before the embargo to US$11.65 a barrel in January 19741. While the embargo was lifted in March 1974, higher oil prices remained.

The broader economic impact of these developments was far-reaching and continued well beyond the initial period of crisis. For many industrialised nations, the decade in the 1970s were marked by a pe...