The Great Inflation and Its Aftermath: The Past and Future of American Affluence

The Great Inflation in the 1960s and 1970s, notes award-winning columnist Robert J. Samuelson, played a crucial role in transforming American politics, economy, and everyday life. The direct consequences included stagnation in living standards, a growing belief—both in America and abroad—that the great-power status of the United States was ending, and Ronald Reagan’s election to the presidency in 1980. But that is only half the story. The end of high inflation led to two decades of almost uninterrupted economic growth, rising stock prices and ever-increasing home values. Paradoxically, this prolonged prosperity triggered the economic and financial collapse of 2008 and 2009 by making Americans—from bank executives to ordinary homeowners—overconfident, complacent, and careless. The Great Inflation and its Aftermath, Samuelson contends, demonstrated that we have not yet escaped the boom-and-bust cycles common in the nineteenth and early twentieth centuries. This is a sobering tale essential for anyone who wants to understand today’s world.

The fan chart depicts the probability of various outcomes for CPI inflation in the future. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves reaches ?275 billion and remains there throughout the forecast period. If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective judgement is that inflation in any particular quarter would lie within the darkest central band on only 10 of those occasions. The fan chart is constructed so that outturns of inflation are also expected to lie within each pair of the lighter red areas on 10 occasions. In any particular quarter of the forecast period, inflation is therefore expected to lie somewhere within the fan on 90 out of 100 occasions. And on the remaining 10 out of 100 occasions inflation can fall anywhere outside the red area of the fan chart. Over the forecast period, this has been depicted by the light grey background. In any quarter of the forecast period, the probability mass in each pair of identically coloured bands sums to 10%. The distribution of that 10% between the bands below and above the central projection varies according to the skew at each quarter, with the distribution given by the ratio of the width of the bands below the central projection to the bands above it. In Chart 3, the probabilities in the lower bands are the same as those in the upper bands at Years 1, 2 and 3. See the box on pages 48–49 of the May 2002 Inflation Report for a fuller description of the fan chart and what it represents. The dashed line is drawn at the two-year point.

Soaring inflation which recently hit a 3-? year high of 7.61 percent has become a major cause of concern for the people in India, especially for the ones who are less privileged.. hope the govt. brings out corrective measures to curb inflation soon enough (unfortunately 'soon' is one word which is yet to be defined in our govt.'s dictionary!!) btw this is an old man who makes a living by selling bhel on the streets , his disheartened expression says it all.

The friendship between Queens gangsta buddies Sincere and Tommy (rap stars Nasir 'Nas' Jones and Earl 'DMX' Simmons) is tested when Sincere tries to leave their lethal, drug-dealing lifestyle behind in this powerful urban drama from acclaimed music video director Hype Williams. Taral Hicks and Wu Tang Clan alumnus Clifford 'Method Man' Smith also star. 95 min. Widescreen (Enhanced); Soundtracks: English Dolby Digital 5.1, DTS 5.1, Dolby Digital 2.0; Subtitles: Spanish; audio commentary by Williams; deleted scene; featurette; theatrical trailer; bonus CD.