Broad money (% of GDP)_

Event_Log

1. 011979Islamic RevolutionAssociation

   Mohammad Reza Shah's government falls; the Islamic Republic is proclaimed under Ayatollah Khomeini on 1 April 1979.

   Why this link: Broad money rose from 33.5% of GDP (1977) to 59.6% (1980), a more-than-25-point jump in three years, as nominal GDP contracted in real terms (see the GDP-growth chart) while money supply kept expanding to finance the new state's obligations -- both a monetization-of-deficit story and a shrinking-denominator story at once.

   Caveat: The GDP denominator's real contraction and the money supply's nominal expansion are two distinct effects compounding in the same ratio; this series alone cannot cleanly separate how much of the rise is 'more money' versus 'less real output'.

   Lag: gradual over 2-3 yearsSource: Encyclopaedia Britannica
2. 0220142014-2016 oil price collapseAssociation

   Oil prices fall from ~$115 to below $30/barrel amid US shale supply growth and OPEC's decision not to cut output; a major driver of Venezuela's and Russia's subsequent crises, and a fiscal shock for Saudi Arabia and Iran.

   Why this link: Broad money climbed from 61.0% of GDP (2014) to 79.1% (2016), among the highest monetization ratios in this database's country set, as oil-fiscal revenue was squeezed by both the ongoing sanctions regime and the 2014-16 global oil-price collapse, pushing continued bank-financed government spending even as nominal GDP growth slowed.

   Caveat: None substantial beyond the general difficulty of separating sanctions effects from the concurrent global oil-price shock, both pointing the same direction here.

   Lag: gradual over 2-3 yearsSource: US Energy Information Administration