PRAISE FOR THE ECONOMIC RESULTS OF 1979 TO 1982. A couple of minutes on Google brought this paper which praised Paul Volcker’s accomplishment from 1979 to 1982. It’s a paper by Professor Blinder in April 2005, entitled “What Have We Learned since October 1979?â€. The same man who (as I posted yesterday) described the economic results of 1979 to 1982 as “miserable”. In the 1995 paper, Professor Blinder points out the situation of the economy in 1979, with rampant inflation.: “….back then many people believed that 10% inflation was so deeply ingrained in the U.S. economy that we might to doomed to, say, 6-10% inflation for a very long time.”
In his 1995 paper, Professor Blinder noted that he believed that: “the Fed overdid monetary stringency in 1980-81″, so that the the depression was deeper than it needed to be, but his emphasis was on the success in stopping inflation with much less pain there was than had been expected. He said:”I’d like to begin by emphasizing that Paul Volcker re-taught the world something it seemed to have forgotten at the time: that tight monetary policy can bring inflation down at substantial, but not devastating, cost…. Yes, disinflation hurt, but much less than what the
pessimists envisioned.”