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The Mistake of 2008

Gavyn Davies has a good post on core inflation, monetary policy, and all that. He summarizes nicely the thinking behind the Fed’s belief that a one-time surge in commodity prices is not a reason to tighten. But I’m a bit surprised — not so much about Davies as about the discussion in general — at how little attention is given to the ECB’s Mistake of 2008, which illustrates the trouble with focusing on headline inflation......

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