It is worth pausing to note the recent death of Paul Volcker. Pyrmonter’s first consciousness of ‘economic’ issues was learning as an under-ten that the value of a 20c bag of lollies from the deli kept falling, and the price rose steadily to 25c, then 30c and then 50c (Pyrmonter gave up on the sweets shortly after, though more because the deli stopped carrying spearmint leaves).
One of the central issues for students of economics in the 1970s and 1980s was the problem of inflation. There were many explanations, ranging from the post-Keynesians (competition for markets, and Keynes’s odd distinction between forms of inflation) through various shades of neo-Keynesian and New Keynesian; models of cost-push and demand pull (associated later in the period with ‘Keynesians’, though, as far as Pyrmonter can tell, first introduced by the non-Keynesian Gottfried von Harbeler, writing fo rhte AEI); and the, ultimately triumphant, views associated with Friedman and the monetarist revival. The harm associated with inflation was debated; Pyrmonter’s thinking is that it is substantial. Steve Horowitz essayed both the conventional and some less conventional views in an excellent essay.
While not a theorist, Paul Volcker’s name is closely associated with the great disinflation that began in the US, was followed in the UK, and rather later, in Australia. Inflation is, and has been for the past two decades at least, of minor concern: so much so that we’ve seen the revival of naïve/kindergarten Keynesian critiques again from the left. Allowed their head, no doubt we will be in need of another Volcker in a generation or so.