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

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Third, are inflationary risks trivialised or excused? It took 2.5 years for the annual rate of UK inflation to rise from 0.3 per cent to 10 per cent: yet, throughout that period, the Bank of England persistently forecast that inflation would return to the 2 per cent target within two years. A myth-busting explanation of inflation, the desperate gullibility of central bankers and finance ministers—and our abject failure to learn from history From investors and monetary authorities to governments and policy makers, almost everyone had assumed inflation was dead and buried. But now people the world over are confronting a poisonous new economic reality and, with it, the prospect of vast and increasing wealth inequality. it makes economic planning incredibly difficult, causing people to invest time in thinking about inflation to the detriment of more productive activities, 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),

Germany famously suffered aterrible 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 adecline 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.

14 Urgent Lessons from the Last 2,000 Years

it leads to extreme redistributions of wealth that are rightly perceived as arbitrary and unfair, and 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.

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.King makes his case with verve, in the process delineating the pernicious effects of inflation and underscoring the absurdity of thinking it could never reappear in advanced economies.”—Max Harris, Finance & Development Why not? Industry experts say oil and gas companies saw bigger money in letting prices run higher before producing more supply. They can get away with this because big oil and gas producers don’t operate in a competitive market. They can manipulate supply by coordinating among themselves. Since the 1980s, two-thirds of all American industries have become more concentrated 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 Secretary Historically informed and lucid.”—Martin Wolf, Financial Times, “Best Summer Books of 2023: Economics” 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.