Tumbling Money Supply Alarms Economists Who Foresaw Inflation
- Tightening ‘gone too far’ as money supply signals recession
- Unfashionable since the 1980s, monetarists gain attention
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Britain’s money-supply economists, who emerged from obscurity in the pandemic by correctly anticipating sky-high inflation before anyone else, are sounding the alarm again.
Money supply growth is collapsing in the UK, eurozone and US, and they read that as a warning of recession and deflation. Central bankers have raised interest rates too far and, if the so-called monetarists are proved right again, they say there should be a “clear out” of officials.