We Need to Talk About Inflation: 14 Urgent Lessons from the Last 2,000 Years

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In the final chapter, he looks at possible solutions including institutional constraints while offering the following 14 lessons: It could raise prices and rake in more money because P&G faces almost no competition. The lion’s share of the market for diapers, to take one example, is controlled by just two companies – P&G and Kimberly-Clark – which roughly coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&Gs at the same time P&G announced its own price increases. King concluded by looking to the future. He saw two major risks - that central banks may only be able to achieve their inflation targets with a lot more heavy lifting from monetary policy (thereby risking a hard landing), or that they are so fearful of the ramifications of far tighter monetary policy (particularly if fiscal policy has run out of space) that higher inflation ends up being accommodated.

Are there signs of monetary excess that indicate heightened inflationary risk? Here, King points to the rate of US monetary expansion during the pandemic.There was also a tendency for some policymakers to claim that inflation was being generated outside of their field of influence, according to King - in a similar vein to UK Chancellor Barber’s claims in the 1970s. In other words, that some believed the source of inflation was not something that policymakers could control. PDF / EPUB File Name: We_Need_to_Talk_About_Inflation_-_Stephen_D_King.pdf, We_Need_to_Talk_About_Inflation_-_Stephen_D_King.epub An] excellent and readable new book about the re-emergence of inflation.”—Larry Elliot, The Guardian Everything you wanted to know about inflation but were afraid to ask. This book is timely, well-researched and very well-written.”—Mervyn King, former governor of the Bank of England Deep down, most economists know (or think they know) what is needed to cure inflation: an independent central bank, tightened monetary policy, and fiscal prudence to mitigate the incentive for inflation becoming too high. Yet today we can see that ridding the economy of elevated inflation is easier said than done.

it makes economic planning incredibly difficult, causing people to invest time in thinking about inflation to the detriment of more productive activities (Germany: buying two beers at the same time; Turkey: hoarding washing machines), But none of this responds to the deeper structural issue – of which price inflation is a symptom: the increasing consolidation of the economy in a relative handful of big corporations with enough power to raise prices and increase profits. Boeing and McDonnell Douglas have merged, leaving the US with just one large producer of civilian aircraft: Boeing. The book is genuinely interesting throughout, yet also wide‐​ranging, so choosing sections to review is difficult. But three areas where King has alot of particularly interesting things to say are on how policymakers might think about inflation’s persistence, why inflation matters, and the difficulties of alleviating modest inflation.

14 Urgent Lessons from the Last 2,000 Years

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Not just a useful and well-written account of inflation for the layman, but a contribution to a debate that is still very much live. A brilliantly clear and concise new history.”—Juliet Samuel, Times (UK)Historically informed and lucid.”—Martin Wolf, Financial Times, “Best Summer Books of 2023: Economics” ii. have there been signs of monetary excess sufficient to indicate a heightened inflationary risk? A shame, because nothing is more topical than inflation at this point in time. But this book was poorly served by its structure.

Why is inflation such a bad thing? Many people conflate inflation with the cost of living and are hostile to it because of the effect a rising price level. Germany famously suffered a terrible hyperinflation in 1922–1923, with a monthly inflation rate of 322 percent. Yet, remarkably, German real incomes per capita fell only 7.8 percent between 1918 and 1923, considerably less of a decline than seen in the United Kingdom over the same period. In other words, even though prices were shooting up, so were nominal incomes—at least across the economy in aggregate. The major costs of large bouts of inflation are not that they make us worse off, though for many people they undoubtedly do. No, the three biggest costs of high inflation are: The government green-lighted Wall Street’s consolidation into five giant banks, of which JP Morgan is the largest. How will the consumer react as the cost of living ratchets up? Right now, we don't know. It's been a very long time since there has been a comparable situation. We need our collective ears to the ground on this matter more than any other. Most of those who have to deal with inflation are too young to remember when it was last a serious issue. This book teaches them what they need to know. King’s lessons command our attention.”—Lawrence H. Summers, former US Treasury SecretaryCelebrated economist Stephen D. King-one of the few to warn ahead of time about the latest inflationary upheaval-identifies key lessons from the history of inflation that policy makers chose not to heed. From ancient Rome through the American Civil War and up to the asset bubbles of today, inflation stems from policy error, sovereign greed, and a collective loss of faith in currencies. As clients approach agencies, they need to be flexible. It's the necessary behaviour to get great work while controlling cost. Your agency's profit is not a cost of doing business, it's the motivation for an organisation to put all their efforts into your challenge. Help them maintain margin by being flexible in how other costs are managed. That is your right. But you'd be advised to read this book first."-Stephanie Flanders From investors and monetary authorities to governments and policy makers, almost everyone had assumed inflation was dead and buried.