Don’t go down wobbly path of Arthur Burns-like inflation errors
There are worrying parallels inside the policymaking world today with the flawed New Deal thinking that led central bankers to let the inflation genie out the bottle in the 1970s.
Arthur R. Burns was the Fed Chair who got it all wrong and let the inflation genie out of the bottle. Paul Volcker had to put it back when he became Chair in 1979 – a difficult and costly task.
Burns reflected on how he erred – a real mea culpa in his Per Jacobsson speech just before Volcker became Chair. Volcker was there and listening.
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Adrian Blundell-Wignall writes on the world economy and is a former director of the OECD. He is currently in Paris.
