Greg Mankiw

James Hamilton

Robert Skidelsky

Nouriel Roubini

I’ve been reading Kenneth Rogoff and Carmen Reinhardt’s new book, “This Time is Different,” and have become somewhat more convinced that short term inflation is a possibility. This is not so much because markets are pointing towards inflation, but because Rogoff and Reinhardt provide convincing evidence that many equilibria may be possible in financial markets for a given set of circumstances. Just because one outcome is realized does not mean that markets will not quickly jump to the other. In other words, inflation fears may not show themselves in the market but could hit with little to no warning. I’m still of the opinion that this shouldn’t be our primary concern, but it should certainly be on the radar.

-Meusebach (figure that one out)

Update: I should not have left out Free Exchange.


2 comments so far

  1. dailycrockett on

    From my experience in studying economic policy history, there is always someone afraid of inflation. In 1933, with 24% unemployment and wholesale prices dropping like a stone, folks ripped on the administration about how deficit spending would cause inflation. This is not to say that inflation should not be a concern, but nothing to warrant the flock to gold phenomenon we are seeing.

  2. dailycrockett on

    Yeah, I’d agree with that. What I’m curious about: how come it is so rare to see inflation with weak labor markets in developed countries but not in emerging markets? In Argentina’s financial crisis of the early 2000’s, for example, we saw 50% of households fall below the poverty line, soaring unemployment, and rising inflation.

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