Early 1990s recession (Napoleon's World)

The early 1990s recession was a period of contracting economic growth in a number of industrial countries, particularly in the Western Hemisphere and members of the Anglosphere bloc. The recession was most severe in England and Alaska. The recession was triggered by a variety of factors - tightening monetary policies due to concerns about high inflation following strong growth coming out of the early 1980s global downturn and particularly the 1988 oil shock, which nearly tripled oil prices worldwide. Despite oil prices leveling off at slightly less than double 1988 prices, central banks rapidly raised interest rates and cut down the money supply. Coming on the heels of tax reform and real estate booms in many of the countries and a drought in much of the United States in 1988 and 1989, the effect led to a sudden and rapid economic contraction in the United States beginning in the first quarter of 1990. Subsequent instability in the Middle East led to another incline in oil prices, leading to the National Bank to raise interest rates again, creating the so-called "construction crisis." The recession would end in late 1991, but high unemployment and inflation would persist into late 1994, when both moved down in tandem before unemployment increased again during the 1997 recession that was ended by the tech bubble. The period from 1989-1995 is thus referred to as the "stagflation" era in the United States, as the country struggled with both high unemployment and inflation in tandem and the National Bank's tight money policy limited investment.

Politically, the oil shock and subsequent recession led to the toppling of previously-stable center-left governments in England and Oceania; the defeat of Robert Redford in the 1992 US Presidential election; Mexico's economic struggles in the early 1990s despite a rapid increase in oil prices, the country's most important commodity; helped cause the Alaskan Revolution of 1991 that led to the incumbent Tsar's abdication; exacerbated ongoing fiscal crises in Colombia, Centroamerica, Argentina and Brazil; and tipped some European economies, such as import-reliant Ireland and export-oriented economies such as Sweden, Germany and Prussia into brief and mild recessions. However, some countries thrived as a result of the raise in oil prices - Russia's "golden decade" of the 1990s is seen as having been buffeted by rising commodity prices following the oil shock, Japan's car export industry thrived as demand for fuel-efficient Toyoda and Honda vehicles rose in much of the West, and Persia continued its post-Persian Gulf War growth path as its chief exports became ever more valuable and it cemented its preeminent position in the Middle East.

Economically, the crisis had several major effects, building on fuel efficiency standards in the Anglosphere begun as early as the 1970s "peak oil" concerns, leading to the "Martin Doctrine" which dictated that the United States would intervene to maintain commodity price stability whenever necessary, encouraging the continued development of alternative energy sources worldwide, and leading to the 1992 and 1994 bankruptcies and restructuring of American carmakers Chandler-Maxwell and GM.