Putting context around inflation in the US
Prior to the 1970s, inflation in the US was strictly a wartime phenomenon. Then came the Great Inflation, from 1965 to 1983, which arose from a confluence of factors that led to a decade-long period of high inflation and high unemployment, dubbed “stagflation”. Upon his appointment as chair of the Federal Reserve (the US central banking system) in 1979, Paul Volcker took aggressive steps to wring out inflationary expectations. Inflation dropped from an April 1980 high of 14.6% to 2.4% in July 1983. Subsequently, the Fed made inflation, rather than unemployment, its central...