1970s Stagflation? Don't Buy It for a Nanosecond
Larry Kudlow disagreed, and said "Stagflation is a total canard."
The money supply data support Larry Kudlow, not John Browne. The chart above compares the growth of M1 during the peak of the stagflation period of the 1970s (the 85 month period from December 1974 to December of 1981) to the growth of M1 over the last 85 months, from January 2001 to January 2008. (M1 is set to equal an index value of 100 in the beginning month of each sample period.)
Notice that there is a significant difference between the two periods: During the 1970s, M1 grew by almost 60%, compared to a 24% growth during the last 7 years. And for the last 3.5 years, M1 has been flat, with almost 0% growth!
Like Larry Kudlow, when it comes to stagflation, "I don't buy it for a nanosecond." Not gonna happen.