David Dodge speaks with the Globe and Mail about how inflation today compares to the crisis of the 1970s. He says:
- “It’s clearly different … But I don’t think it’s so very different. We should not ignore the lessons that we learned from that experience.”
- “The issue for central banks is very much that they need to be careful not to let the expectations genie out of the bottle … which we didn’t do in the 1970s."
- “They need to get (the policy interest rate) up, and get that up quickly, to break expectations as quickly as possible – certainly by the summer.”
David also says, “I think we have to be prepared to be thinking about a world that is more supply-constrained than we were used to in the first 19 years of this century.”