Thursday, June 15, 2017

Forder & Friedman v Irwin, RE: 3 to 4% inflation is hardly memorable

Neil Irwin:

...inflation also hovered in the range of 3 to 4 percent through the mid-1980s, hardly remembered as an economic nightmare.

James Forder:

The question [Samuelson and Solow] were addressing was that of the explanation of the inflation of the 1950s – particularly the period 1955-57 – and the implications it had for macroeconomics. Mild though that was later to seem, this 'creeping inflation' as it was called was, at the time, a source of much anxiety.

Milton Friedman:

it took a century for the inflation in Rome, which contributed to the decline and fall of the empire, to raise the price level "from a base of 100 in 200AD to 5000... -- in other words a rate of between 3 and 4 percent per annum compound."

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