A Simple Test of the Summers-Blanchard Inflation Hypothesis

Economics proceeds one funeral at a time

Old ways of thinking are almost impossible to kill. They usually only go away when the heads which hold the old ideas end up in the grave. As the old saying goes, economics proceeds one funeral at a time. These mental rigidities are most obvious in the implicit theories of the inflation process in the heads of the doyens. Larry Summers, Olivier Blanchar…