Is There A New Working Theory Of Inflation
Submitted by Joseph Carson, former director of global economic research, Alliance Bernstein
It has long been observed that inflation is a monetary phenomenon. The foundation for this observation was developed decades ago when accelerating and decelerating rates of consumer price inflation were associated with similar patterns of growth in money. Nowadays, the concept of money itself is under constant refinement, and money growth is no longer part of the Federal Reserve objectives, which raises an important question, is there a new working theory of inflation?
I raise this question for the simple reason that structural changes in the financial