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Beware central bankers on monetarist war path
The state of the world economy is reminiscent of the period after the first world war in Europe. The three episodes of high inflation in people’s minds – early 1920s, 1970s and 2020s – are all 50 years apart. In my student days we called this (after the eponymous Russian economist) a Kondratieff long cycle. If the world is in one of these, short-run policy changes worsen the crisis. So don’t be surprised if central banks cause a recession as they move into macho interest rate-hiking mood. In 1919-23, Europe suffered shortages and rampant inflation, with the worst example in Germany (caused above all by the ... (full story)