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Inflation, hyperinflation and deflation have all had profound effects on societies, especially during periods of war and crisis. Today's approach to managing inflation has been shaped by these episodes and informed by debates between different schools of economic thought from Fisher and Hayek to Keynes and the monetarists. This accessible and authoritative overview explores the role of inflation in the modern economy, from its place in monetary policy and in money supply to its effects on everyday business.
In a compelling analysis, the book shows that since the financial crisis in 2008–09, inflation rates have remained persistently higher than interest rates worldwide, which is the inverse of our basic understanding of how inflation normally affects markets. The result of this inversion has been that the effective real return on investment has become negative, and consequently, the investment rate has dropped across western economies. At a time when inflation once again challenges the world's leading economies, the book offers valuable insight into the monetary policy of central banks.
Introduction
Part I: Innocence: when principles guided policy
1. Drs Fisher, Friedman and no inflation
2. The rise of inflation
3. The end of metal for money
4. War, peace, deflation and recession
5. Seigniorage versus hyperinflation
6. Blaming the victim
7. Inflation and unemployment
Part II: Ignominy: central banks, insurance and inflation
8. The rise of central banks
9. Fractured insurance
10. Bank failure and crisis
11. The problem of excess reserves
12. Giving away the inflation tax
Part III: Purgatory: capital markets, interest and inflation
13. Fed price-fixing
14. A plague of negative interest rates
15. Shifting money demand
16. The new usury prohibition?
17. Money, inflation and banking reform
Description
Inflation, hyperinflation and deflation have all had profound effects on societies, especially during periods of war and crisis. Today's approach to managing inflation has been shaped by these episodes and informed by debates between different schools of economic thought from Fisher and Hayek to Keynes and the monetarists. This accessible and authoritative overview explores the role of inflation in the modern economy, from its place in monetary policy and in money supply to its effects on everyday business.
In a compelling analysis, the book shows that since the financial crisis in 2008–09, inflation rates have remained persistently higher than interest rates worldwide, which is the inverse of our basic understanding of how inflation normally affects markets. The result of this inversion has been that the effective real return on investment has become negative, and consequently, the investment rate has dropped across western economies. At a time when inflation once again challenges the world's leading economies, the book offers valuable insight into the monetary policy of central banks.
