Across the rich world consumer prices are rising by 10% year on year, the highest rate since 1983. That year holds a special place in the history books. It was the final year, after many, in which annual inflation was in double figures. Thereafter it moved downwards, paving the way for the low inflation of the 1990s.
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Today’s central bankers hope to repeat the trick and thus enter monetary policy’s hall of fame alongside the giants of the 1980s. Paul Volcker, who led the Federal Reserve from 1979-87, is the biggest giant of all. But Gerald Bouey in Canada, Carlo Azeglio Ciampi in Italy and Karl Otto Pöhl in Germany—who memorably compared inflation to toothpaste (“once it’s out, you can hardly get it back in again”)—also presided over disinflation in that decade.
Central bankers hope their job…