The Intelligence from The Economist Debasement all around: lessons from 16th-century inflation
Dec 28, 2022
Charlie McCann, Southeast Asia correspondent for The Economist, dives into historical inflation's modern echoes. He draws parallels between 16th-century England's currency debasement and today’s economic challenges, revealing how societal unrest followed financial turmoil. McCann also shares insights on the Baduy people's struggle to maintain their traditions amidst modern pressures. Plus, he touches on quirky global dog breed trends, exploring how media influences popularity and ownership dynamics across countries.
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Inflation's Recurring Nature
- Soaring inflation after periods of price stability is a recurring historical phenomenon.
- It has profound social and political consequences, impacting consumer confidence and potentially leading to protests.
16th-Century Inflation Surge
- The 16th century saw an unprecedented surge in inflation, a phenomenon previously unknown for generations.
- This unexpected rise in prices, even by small percentages, led to significant real-terms cuts in people's living standards due to stagnant wages.
French Inflation Debate
- In 16th-century France, two experts, Jean Bodin and Jean Cherrier de Malestroit, debated the causes of inflation.
- Bodin argued for supply-side shocks, while Malestroit blamed excessive spending.