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The diamond industry was buffeted b y extreme price volatility during the last decade, unlike any encountered since the Great Depression o f the 1930s. Although the industry is currently enjoying a resurgence o f activity worldwide, particularly i n the Far East, today's market differs significantly from what i t was 10 years ago. This article reviews the factors that led to the enormous demand for diamonds in the late 1970s, examines the causes of recession in the early 1980s, and provides an analysis o f the comeback of diamond in 1986. Inasmuch as events during this period ushered m a n y changes into the diamond trade, an understanding o f h o w economic forces affect the supply. demand, and value of diamond i s critical to all gemologists. Factors such as i n f i tion, recession, interest rates, and disposable income, as well as fluctuations i n worldwide exchange Tales, had, and undoubtedly will continue to have, an i m pact on the health of the diamond market ,

An Economic Review of the Past Decade in Diamonds