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

An economist, an adviser to investment banks, and a public intellectual, King ruminates on the return of inflation. The author was among those who warned that inflation was on the horizon in 2021 and cautioned that it was unlikely to be transitory. His focus here is on the pressures facing central banks and the misjudgments they make, specifically on monetary policies. He attributes these errors in some cases to flawed economic models, and in others to political pressures. A fuller account of the return of inflation would have placed more emphasis on the effects of COVID-19, including both pandemic-related supply chain disruptions and the fiscal measures adopted by governments in response. King points to a combination of monetary policy rules and central bank independence as the best defense against inflation but concedes, somewhat dispiritingly, that politics tend to trump economics. Inevitably, central banks find it difficult to counter political pressure to turn on the monetary taps. In reaching this conclusion, King channels Arthur Burns, the U.S. Federal Reserve chair who presided over the Great Inflation of the 1970s and who despaired over the inability of central bankers to resist the coercion of politicians.