Estimados Académicos y Académicas FEN,

Les extendemos la invitación al seminario que organiza el Departamento de Economía, en el que se presentará el trabajo titulado "Fiscal Lessons from the Great Inflation of the 1960s and 70s in the UK: A Cautionary tale for the U.S".

Expone: Michael Bordo, Profesor de Economía, Rutgers University.

Coautores: Oliver Bush (Bank of Engalnd), Ryland Thomas (Bank of England).

Abstract: The resurgence of inflation during 2022 and 2023 has resonance with the Great Inflation of the 1960s and 70s. Discussion of the causes of the Great Inflation has centred around the relative importance of “bad luck” – the unusually large commodity price and supply-side shocks - and “bad policy” reflecting failures in both monetary and prices and incomes policies. By reconsidering the historical and empirical record of inflation in the UK from 1950s to the early 1990s we show that the persistence of the Great Inflation in the UK cannot fully be explained by these factors, although these can account for some of the major fluctuations. Instead, underlying inflation and inflation expectations appear to be the result of a sequence of regime shifts. We argue those regime shifts are as much related to fundamental changes in fiscal policy as they are to monetary policy and union reforms. We show that fiscal policy was at the heart of many of the problems in the UK during the Great Inflation. In contrast to most of British history, it was not used to stabilise the public finances. Instead, it was used to keep unemployment down and growth up, to subsidise losers from terms of trade shocks and to secure deals with the unions. Our empirical evidence suggests that the operation fiscal policy was a key underlying source of inflationary pressure in this era, unlike in other peacetime periods in modern British history. 

El formato será presencial y el seminario se desarrollará en la Sala P-1605.

Saludos cordiales,

Dirección de Investigación