Volcker-Reagan Rerun

There has been a competition for the most apt historical analogy to the present macroeconomic situation: some liken it to the 1960s for guns and butter problems, some to the 1970s for oil shocks and stagflation, and some even to the 1930s for the potential long lasting contraction supposedly to come. Actually, the clearly comparable episode to today’s situation is the Volcker Reagan episode of the early 1980s, with currently us sitting in 1979. The good news is that means the present economic challenge is both comprehensible and manageable with current policy tools.