Understanding Transitory Inflation

Leading economists Mike Spence and Mohamed El-Erian talk about the “pretty complicated and disorienting environment” we face. 

In this episode of the McKinsey Global Institute’s Forward thinking podcast, co-host Michael Chui talks with A. Michael Spence, dean emeritus of the Stanford Graduate School of Business, and Mohamed El-Erian, president of Queens’ College Cambridge and chief economic advisor at Allianz. Together with former UK Chancellor of the Exchequer and Prime Minister Gordon Brown, they have leveraged decades of experience to explore the question “Is the world in a state of permacrisis?” 

In this podcast, the guests touch on the following:  
•    How the New Zealand central bank came up with 2 percent as an arbitrary inflation target, which was then adopted by the central banks of major economies around the world. 
•    How the Queen of the United Kingdom asked a room full of economists why they hadn’t seen the Great Financial Crisis coming. 
•    How finance hijacked growth strategies, leading to 20 lost years of thinking about how to promote productivity and high, durable, inclusive growth. 

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