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.

About the Author

Max Gillman is Hayek Professor of Economic History at the University of Missouri-St Louis. His books include Advanced Modern Macroeconomics (2011) and Inflation Theory in Economics (2009). He has also edited Collected Papers on Monetary Theory by Robert E. Lucas, Jr. (2011).

Reviews

Yet again, inflation has returned. Rather than searching for historical parallels, this book provides an extremely important exploration that links the past to contemporary inflation. This is an extremely useful book for central bankers, macroeconomists and readers who wish to deepen their understanding of the causes - and effects - of inflation.

-- Elisa Newby, Bank of Finland

Central bankers of the world are hereby put on notice: Based on impeccable scholarship, Max Gillman's devastating indictment of their policies explains why distortionary interest rates impose severe damage on economies by misallocating the financial investment resources needed to fuel productive growth. He makes a compelling case against the Federal Reserve's price-fixing approach to determining the cost of capital - and illuminates the unhealthy relationship between the Fed and the US Treasury Department. Gillman's analysis will be riveting for monetary policy experts, even as it will prove eye-opening for non-specialists who have long sensed that government-engineered inflation and manipulated money betray the principles of democratic capitalism.

-- Judy L. Shelton, Senior Fellow, The Independent Institute, former Chairman of the National Endowment for Democracy, and former US Director of the European Bank for Reconstruction and Development

Professor Gillman's book is important and ambitious. Since the link between money and gold was broken in 1971, the world's major economies have suffered repeated inflation outbreaks. Why? Gillman asks this fundamental question - and insists, against the latest fashions, that the behaviour of the quantity of money is crucial to the answer. His views are challenging, thought-provoking and central to current debates on economic policy.

-- Tim Congdon, Chair and Founder of the Institute of International Monetary Research

This is a thought-provoking journey through monetary and financial history, asking how we got into some of our current monetary messes and banking binds; and wondering how our forebears have helped or hindered us in getting here.

-- Charles Nolan, University of Glasgow

An insightful journey through the history of inflation and its master, the Central Bank. Gillman explains how the Fed suppressed inflation, flooding the financial system with money since 2008 and imposing significant distortions. This equilibrium has now ended to the relief of Chicago-trained Gillman and all of us who believe that the fundamental principles of economics still work.

-- Lorenzo Forni, University of Padova and author of The Magic Money Tree and Other Economic Tales

Inflation is back, and this book is a timely account of how this happened and how it can be cured. On the way Professor Gillman provides a learned history of the origins and development of money across the world since the very beginnings of the ancient world.

-- Patrick Minford, Cardiff Business School



Book Information
ISBN 9781788212373
Author Professor Max Gillman
Format Paperback
Page Count 264
Imprint Agenda Publishing
Publisher Agenda Publishing