Good evening
Thank you for inviting me to speak today. This is an unusually challenging moment for the global macroeconomy. Who would have believed, even a year or two back, that US inflation would be at 8.3%, that euro area inflation would be at 9.1%, or that UK inflation would be at 9.9%? Who would have thought that major central banks would be raising interest rates at the fastest pace in a generation? Or that the euro and the British pound would be at parity with the dollar?
Just over a decade ago, it was common to talk about a Great Moderation in global macroeconomic conditions. Mervyn King, a former Bank of England Governor, called it the NICE period: an acronym for Non-Inflationary, Consistently Expansionary. Today it would be more appropriate to talk about VICE: a Volatile, Inflationary and Contractionary Economy.
