The politics of inflation and disinflation from the 1950s to COVID-19

What are the political effects of rising inflation?

In a new article for the LSE European Politics and Policy (EUROPP) Blog, our Visiting Senior Fellow Dr Bob Hancké and Tim Vlandas draw on their recent book, The Great Moderation Revisited, to show how the aftermath of the inflationary episodes of the 1970s can shed light on what has happened over the past five years.

About the book

"The sudden, dramatic rise in inflation after the COVID-19 pandemic and the Russian invasion of Ukraine interrupted three low-inflation decades and reignited the question of the causes of and responses to inflation. This book addresses that question by looking back at the emergence of the low-inflation ‘monetarist’ macroeconomic regime in the advanced capitalist economies during the 1980s. While dominant perspectives emphasise new ideas or structural power, this book puts the underlying politics at the centre of the analysis. It combines two processes in that analysis. First, the slow but steady improvement of life chances across the population since the 1950s, which shifted the relative concerns about inflation and unemployment across the population. Second, the strategic responses of political parties, and particularly social-democratic parties, to inflationary shocks in the face of a changing electorate. Case studies of leading European economies and the US underpin the argument."