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

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Since the 1980s, when the US government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated. 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 Impulse for bad policies / People will not put up with these disruptions for long before they demand that politicians act. Unfortunately, that can lead to bad policies, such as bailing out some people (a palliative that doesn’t solve the underlying inflation problem) or price controls (which create shortages and all sorts of other inefficiencies). King exhaustively and patiently takes on the case for price and wage controls, expertly using the historical evidence to rubbish their prospect of solving inflation.

He goes on to say that there are four issues that could have conspired to generate higher inflation this time: institutional changes (such as the Fed introducing more flexibility into its inflation targeting regime), signs of monetary excess (accommodating the rise in inflation - unlike before the global financial crisis where central banks offset deflation from abroad by running policy too loose), the trivialisation of inflation, and weaker economic supply conditions. The government green-lighted Wall Street’s consolidation into five giant banks, of which JP Morgan is the largest.If you're working with an agency that's 100% centred in the capital, you can access some amazing talent but will they be best placed to help you manage those input costs? At iProspect, we enter 2022 with 18% of our staff in London, connecting a brilliant team in the capital with brilliant teams throughout the UK and beyond. King also is clearly correct that both supply‐​side and demand‐​side factors have driven the surge in the price level since 2021. Yet, one downside of his not outlining his own “model” of the economy is the failure to define his own preferred monetary rule and so make ajudgment on what actions central banks should have taken and when. He admits that in periods like what we’ve lived through, “policymakers are not easily able to distinguish inflationary squalls from periods of inflationary persistence.” That is true, but it is difficult to square with his justified criticism of the complacency of the economic establishment in letting the inflation genie out of the bottle of late. Some valuable points on MPC decision making at times of uncertainty- but all the really valuable insights in this book (& there are many) get drowned out by it’s less than optimal structure. Distributional costs of inflation / Why is inflation such abad thing? Many people conflate inflation with the cost of living and are hostile to it because of the effect arising price level has on the real value of some fixed forms of income and wealth. But King uses aremarkable statistic to show that this shouldn’t be our main inflationary fear. Some interesting conclusions though. In King’s view the argument used by central banks against tightening, that it was all just ‘transitory’, was fuelled by central banks having presided over a low inflation environment for nearly two decades, falling victim of their own anti-inflation propaganda. As a result, serious mistakes were made when circumstances suddenly changed. We saw the impact of the supply and demand imbalances when Covid restrictions ended and then the extra pressures on energy and food prices with the war in Ukraine. But in King’s view the reappearance of inflation in the last couple of years was not just “a series of unfortunate events” but should have been seen by central banks and acted upon more swiftly.

My kind of inflation book. There is lots of great storytelling, which lightens the subject matter, and makes it accessible to non-experts.”—Moira O’Neill, Financial Times, “Best Summer Books of 2023: Money” If PepsiCo faced tough competition, it could never have gotten away with this. But it doesn’t. To the contrary, it appears to have colluded with Coca-Cola – which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%. A FINANCIAL TIMES "BOOK TO READ IN 2023" "Everything you wanted to know about inflation but were afraid to ask."-Mervyn King "King's lessons command our attention."-Lawrence H. A ‘rules-based’ policy framework is important: the public need to know how policymakers are likely to respond

A myth-busting explanation of inflation, the desperate gullibility of central bankers and finance ministers—and our abject failure to learn from history 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. In this I always look with admiration at Procter & Gamble. For a decade or more, it has looked unfavourably at any commercial proposal that doesn't embrace nearshore and offshore centres of excellence. It's a standard requirement for a global business that reaps the benefits of connecting great teams no matter where they are based.