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Article: The great inflation: inflation, inflationary expectations, and the Phillips cycle 1960-2002: improvements in monetary policy tamed inflation once--can they do it again?
- Article from:
- Business Economics
- Article date:
- April 1, 2008
- Author:
CopyrightCOPYRIGHT 2008 The National Association for Business Economists. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Given the ongoing concern with controlling inflation, it is timely to take another look at the "Great Inflation" of 1966-1983 and to try to understand the process that led to ever-higher peaks of inflation and interest rates. How was this apparently intractable dynamic reversed? While a member of the Board of Governors, Federal Reserve Chairman Ben Bernanke set forth three explanations for the decline in macroeconomic volatility: structural change, improved macroeconomic policies, and good luck. While luck is not controlled by government, and government has only tangential influence on structural change, macroeconomic policy is solely the responsibility of the federal ...