Title And Yet It Moves
Subtitle Inflation and the Great Recession
Author David Miles, Ugo Panizza, Ricardo Reis and Angel Ubide
ISBN 9781912179053
List price USD 38.00
Price outside India Available on Request
Original price
Binding Paperback
No of pages 128
Book size 171 x 241 mm
Publishing year 2018
Original publisher Brookings Institution Press
Published in India by .
Exclusive distributors Viva Books Private Limited
Sales territory India, Sri Lanka, Bangladesh, Pakistan, Nepal, .
Status New Arrival
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Over the last decade, the developed world has been hit by the deepest recession since the Great Depression and a rollercoaster in commodity prices. And yet, core inflation has been both low and fairly stable. A rule of thumb that inflation is always near 2%, though more often than not just a bit below, has been quite reliable. The young, or those with short memories, could be forgiven for looking condescendingly at their older friends who speak of inflation as a major economic problem. But, like Galileo Galilei told his contemporaries who thought the Earth was immovable, “Eppur si muove” (“and yet it moves”). Since most societies regard stable inflation as a goal, it is tempting to describe this solid anchoring of inflation as a great achievement of monetary policy. But what if it was just luck? Will the great anchoring soon lead a great bout of inflation, just as the Great Moderation was followed by the Great Recession? Do we need to change the way in which policy is set to better handle changed circumstances since the financial crash?

The 19th Geneva Report on the World Economy starts by analysing outcomes across countries for the last ten years. Inflation is compared with its behaviour in the period before the financial crash to assess the extent to which it really has been stable, what the proximate causes are, and whether it will stay low in future. The report then assesses theories of inflation in light of these facts, and tries to make sense of them. Next, the report turns to the question we posed at the start: was it good policy or good luck that prevented severe deflation and kept inflation relatively steady?

A description of what policies were adopted and how they interacted with economic shocks informs the conclusions on appropriate policies—both monetary and fiscal—for the future. The report pays particular attention to the role of central banks and the extent of their activities.


About the Authors


List of conference participants


Executive summary

Chapter 1: The inflation puzzle after the Great Recession • The volatile history of inflation • The challenge in 2010 • Four major strands of thinking on inflation • Conclusion: The puzzling stability of inflation

Chapter 2: Digging deeper: Facts about inflation • Measurement • The persistence of inflation • Revisiting the Phillips curve • The central role of expectations • The central bank balance sheet • Policies and inflation expectations

Chapter 3: Refining theory and evidence on inflation • Pure and persistent inflation: Commodity prices and global factors • The Phillips curve: Marginal costs and mark-ups • Interest rates: Fisherianism and inattention • Quantitative easing: From monetarism to reservism • Central banks as fiscal agents • A preliminary assessment

Chapter 4: Good luck or good policies? • Monetary policy and slack • Monetary policy and the symmetry of the inflation target • Monetary policy and hysteresis • Monetary policy and financial stability • Monetary policy and central bank independence • Summing up: Good policies, or good luck?

Chapter 5: Inflation and the policy framework: The future • Would a higher inflation target be warranted? • Should central banks have large balance sheets? • What is the role of forward guidance? • Has monetary policy been too focused on inflation? • What is the role of fiscal policy in managing inflation? • Final thoughts

Discussions • The Geneva Report: Principles and facts • The Geneva Report: Policies


About the Authors:

David Miles is Professor of Financial Economics at Imperial College, London. He was a member of the Monetary Policy Committee at the Bank of England between May 2009 and September 2015. As an economist he has focused on the interaction between financial markets and the wider economy. He was Chief UK Economist at Morgan Stanley from October 2004 to May 2009. In 2004 he led a government review of the UK mortgage market. He is currently undertaking a review for the UK Treasury on reference prices of UK government bonds. David is a research fellow of the Centre for Economic Policy Research and at the CESIFO research institute in Munich. He is Chair of the Board of Trustees of the Institute for Fiscal Studies. He was awarded a CBE in January 2016.

Ugo Panizza is Professor of Economics and Pictet Chair at the Graduate Institute, Geneva. He is also the Director of the Institute’s Centre on Finance and Development, and a CEPR Research Fellow. Prior to joining the Institute, Ugo was the Chief of the Debt and Finance Analysis Unit at the United Nations Conference on Trade and Development (UNCTAD). He also worked at the Inter-American Development Bank and the World Bank and was an assistant professor of economics at the American University of Beirut and the University of Turin. He holds a PhD in Economics from The Johns Hopkins University and a Laurea from the University of Turin.

Ricardo Reis is the A.W. Phillips Professor of Economics at the London School of Economics. He is a consultant to central banks around the world, and is the chief editor of the Journal of Monetary Economics. Recent honors include the 2016 Bernacer prize for best European economist under the age of 40 working in macroeconomics and finance. Professor Reis’ research contributions are the study of sticky information and rational inattention, inflation dynamics and measurement, capital misallocation and the European slump, the role of reserves on quantitative easing and central bank solvency, and the operation of optimal fiscal stabilizers. His public service includes a weekly column for the Portuguese press, and developing European Safe Bonds (ESBies). He held previous positions at Columbia University and Princeton University.

Ángel Ubide is a managing director in Goldman Sachs’ Private Wealth Management group. He has worked for a decade and a half in the hedge fund industry, first at Tudor Investment Corporation and later at the D. E. Shaw Group. He has been deeply involved in the global economic policy debate, mostly as a Senior Fellow at the Peterson Institute for International Economics (2009-16). He is a member of the Euro50 Group and of the Economic Club of New York. He started his career as an Economist at the International Monetary Fund. He received a degree in economics and business administration from the University of Zaragoza and his MA and PhD in economics from the European University Institute in Florence, Italy.

Target Audience:

This book is intended for people interested in Global Economics.


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