## Book Reviews: Unwelcome Return

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**Canonical URL:** [Book Reviews: Unwelcome Return](https://www.imf.org/en/publications/fandd/issues/2023/06/book-unwelcome-return-max-harris)

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## Bibliographic details
- Authors: MAX HARRIS
- Published: June 1, 2023

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### Overview and thesis
- Author of the reviewed book: economist Stephen D. King.
- Central contention: current inflation is not primarily the product of a few shocks—pandemic-induced supply chain snarls or Russia’s invasion of Ukraine—but rather systemic problems in economic policy in recent years.
- Key policy mechanisms King criticizes:
  - Central banks adopted frameworks that bias them toward inflation.
  - Quantitative easing became “totally addictive.”
  - Policymakers believed “their own anti-inflation credibility more or less guaranteed that inflation expectations would remain well behaved.”
  - Central banks are far less independent than they appear and are subject to pressure to do the bidding of fiscal authorities.

### Historical context and examples
- Inflation’s historical recurrence emphasized with examples including:
  - French assignats
  - US greenbacks during the Civil War
  - Weimar’s hyperinflation
  - Roman coinage and medieval debasement
  - The 1970s (noted repeatedly as freshly relevant)
  - Very recent history: Britain’s mini-budget crisis
- Cultural reference: Earnest Jackson’s 1975 funk song “Inflation” cited as resonant with today’s conditions.

### Strengths and limitations of King’s account
- Strengths:
  - Makes the case with verve and vivid historical snapshots.
  - Underscores the pernicious effects of inflation and the absurdity of thinking it could never reappear in advanced economies.
  - Affirms that “inflation must be tackled, head-on and without hesitation.”
- Limitations and contestable points:
  - Argument may lack empathy for real-time policymaking challenges during a once-in-a-century pandemic.
  - Some forward-looking recommendations lack specificity:
    - Which “rules-based” policy framework does King favor?
    - What precisely is meant by calling for “monetary dominance” over fiscal policy?
  - Readers seeking a systematic treatment of inflation over the past two millennia will need to look elsewhere.

### Policy implications and takeaways
- General policy positions presented or endorsed in the review of King’s book:
  - Price and wage controls are rejected: they are “bad in theory and worse in practice.”
  - Immediate and vigorous action to combat inflation is necessary.
  - Awareness that inflation has massive distributional consequences that can be unfair and undemocratic.
- Forward vigilance:
  - The most important lesson: monetary history matters.
  - Central bankers have “gotten the message,” raising rates at a rapid clip.
  - Simultaneous vigilance against deflation is necessary: history is replete with examples of the pain caused by declining prices, and policymakers should avoid forgetting those perils.

### Metadata and authorship noted on the page
- F&D Magazine
- Unwelcome Return
- MAX HARRIS
- June 2023
- MAX HARRIS is senior fellow at the Wharton Initiative on Financial Policy and Regulation.
- Disclaimer: “Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.”

*F&D Magazine — Unwelcome Return — MAX HARRIS — June 2023*

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_Source: https://www.imf.org/en/publications/fandd/issues/2023/06/book-unwelcome-return-max-harris_