Global Inflation? Not Just Yet

The inflation hawks are squawking again. In 1995, they said rising commodity prices and tight capacity would cause inflation. Wrong. In 1996, they said low unemployment would. Wrong again. Today, it's "synchronization." For the first time in history, they argue, industrial, developing, and postcommunist countries will grow simultaneously in 1997 and the global boom will create new inflationary pressures. There is logic to the hawks' argument, but we think their timing is off. There remains plenty of room for growth without inflation.

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