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Abstract

Isabella Weber’s presentation will start from How China Escaped Shock Therapy, her book charting China’s early reform debates, when economists and policy-makers were grappling with the question of how to maintain price stability in the transition to a market economy. In the second part of her talk, she will lay out how her China research has led her to an analysis of today’s inflation that considers the systemic significance of certain prices for overall economic stability. Presenting results from input-output simulations conducted for the COVID-19 inflation in the US, she will illustrate why not all prices are created equal. In the concluding part she will reflect on what this alternative view of inflation implies for monetary theory and economic stabilization.