The author is the Paul A Volcker senior fellow for international economics at the Council on Foreign Relations and author of The Power Law

Early in Bill Clinton’s first presidential term, US Federal Reserve chair Alan Greenspan grew worried. The White House planned to send him a new deputy, the Princeton economist Alan Blinder. The professor’s record on inflation seemed suspect. Rising prices, Blinder had written in the 1980s, were “more like a bad cold than a cancer”. “The myth that the inflationary demon, unless exorcised, will inevitably grow is exactly that — a myth,” he added. The ravages of joblessness were more serious by far. Labour unused in one year would not be available to boost output in the next. It would be lost forever. 

A confidante tried to console Greenspan about his prospective deputy. “It’s not like he’s a communist or anything. It’s just in his early publications he’s noticeably soft on inflation.”