is high inflation dead?

From Krugman.

As a number of people have been reminding us lately, talk of high inflation, nay hyperinflation, has been widespread ever since the Fed began trying to fight the Great Recession. And the failure of the predicted high inflation to appear has done nothing to shake their conviction that they have the truth, and that those of us who have been right are nonetheless wrong.

So, one thing I wonder about is the extent to which this attitude is reinforced not just by the usual crank tendencies, right-wing leanings, and so on, but also by the fact that economists love — looooove — to talk about runaway inflation, precisely because it’s something that’s so easy to explain: you run the printing presses to cover your deficits, and off you go.

Yet this is getting awfully stale.Not only has the promised high inflation failed to appear here in America, but high inflation has largely vanished everywhere.

I did a quick calculation using the IMF’s World Economic Outlook Database, which runs back to 1980. Year by year, how many countries had triple digit inflation in any given year? It looks like this:

Basically, there was a wave of hyperinflations caused by the chaos following the breakup of the Soviet Empire, much like the wave after World War I; since then, Zimbabwe and nobody else.

Even double-digit inflation has become quite rare:

There’s a brief spike around 2008; if you look at it, it turns out to be mainly small commodity-exporting countries pushed into big devaluations by the crisis, leading to one-time jumps in consumer prices. But then it was back to the downward trend.

There are, I think, a couple of morals here. One is that economics textbooks probably talk too much about high inflation; it’s a nice pedagogical set-piece, but not something that’s a real issue in today’s world. Another is that high inflation doesn’t happen just because a country’s rulers are spendthrifts or don’t know about the Emperor Diocletian or something; it is always associated with severe political and social disruption. To stand Milton Friedman on his head, high inflation is never and nowhere a merely monetary problem.