Pat,
You say that stagflation was caused by a "complex of forces that made the US
economy
less competitive in the global economy." Excuse me, but stagflation in the
mid-1970s was
a global phenomenon that hit pretty much all market capitalist,
oil-importing economies,
not just the US. Looking at it as a shock to the AS curve for any of those
economies
remains a mighty powerful way of explaining what happened, even if one
thinks that the
sustained inflations that followed were due to overly expansionary monetary
policy or
something else. There is a very good reason why it was the 1970s oil price
shocks that
led Baumol and Blinder and other textbook writers to introduce the AS/AD
analysis, for
better or for worse.
Barkley Rosser