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Before Volcker became head of the Fed in 1979 the economy was experiencing a period of decline. Between high inflation and oil shocks the Federal Reserve needed to take an active role in slowing expected inflation. Because inflation did not seem to be targeted by the Fed pre-Volcker the country experienced systematic increases in inflation from year to year. The inflation was highly volatile and the country was experiencing recessions partly due to the Fed's highly accomodative attitude which let short-term interest decline while anticipated inflation rose. To try and combat these situations the Fed tried to raise nominal rates the attempts failed because the amount that the nominal rates were raised was by less than the increase in expected inflation. The oil crisis of 1973-74 generated monetary accomodation in the short run which helped keep the economy from experiencing a period of output-growth reducing period. The response to this exogenous shock can not hold up in the medium or long run which will result in a slowing of output-growth.