Bloomberg Businessweek November 22, 2021 pp49 |Special Report|”Transitory Doesn’t Mean Quick” “Today’s inflation resembles past episodes that lasted a while but let to prosperity”
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Examining previous “bursts of inflation, based on annual change in the consumer price index, one can see that the early five months we are experiencing now parallel changes seen after WWI and WWII, 1916 and 1946 respectively. In those cases, inflation hit 20% or more and were sustained at lower levels. For example, 1946 had “15 straight months in double digits and 28 above 5%.” “Both of these periods “involved big government deficits, super loose monetary policy, and supply chain woes.” Sounds familiar! Having said that, “both eventually gave way to eras of low-inflation prosperity.” This latter point supports those “policy makers [that think] we should just ride this one out.” Of course, one shutters to “think of what 23 more months of this would feel like.”
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