Full disclosure: I am generally skeptic about macro forecasts and I don’t think statements like “We had the same situation in 1980 and therefore things will develop like XYZ.” are much helpful. In economics, two situations are never exactly the same and we humans are very good when it comes to finding patterns in essentially random data. However, given how important the topic over the last years was and still is, I couldn’t resist the temptation. This week’s AGNOSTIC Paper is a little scenario analysis how “transitory” inflation actually was in the past.
- Transitory inflation would be a historical best-quintile outcome
- Historically, it took >5 years to get >8% inflation down to 3%