Macro Musings with David Beckworth · Mercatus Center at George Mason University

Mark Blyth on the Winners and Losers from Inflation

June 30, 2025·1 hr 3 min·5 clips

Mark Blyth explains why Milton Friedman's inflation quote is like saying shootings are always a ballistic phenomenon.

This episode of Macro Musings features host David Beckworth and guest Mark Blyth, a professor of international economics at Brown University. Blyth discusses his new book, *Inflation, a Guide for Winners and Losers*, co-authored with Nicola Fraccaroli. The conversation explores why inflation remains a relevant and distributionally complex issue. Blyth explains that the book was motivated by the realization that inflation's costs are not shared equally, as raising interest rates punishes borrowers while rewarding savers. He critiques the common view that inflation is "everywhere and always a monetary phenomenon" by comparing it to saying shootings are always a ballistic phenomenon. The episode details how inflation indices are constructed with significant discretion, using the example of housing costs being measured differently by the Bank of England, ECB, and U.S. agencies. Blyth references a concept by John Otters called "anti-core inflation," which suggested the inflation felt by lower-income groups was much higher than official rates. He categorizes inflation into "good," "bad," and "ugly" types, with hyperinflation belonging to the last category and arising from deeply broken economic systems. A central argument is that inflation creates distinct winners and losers, illustrated by the claim that America's biggest oil companies made $220 billion in extra profits in 2022. Blyth notes that since the top 1% of Americans own about 50% of shares, they disproportionately benefited from this windfall. The discussion questions the exclusive reliance on interest rates to control inflation, tracing this policy shift back to the Volcker era. Blyth contrasts this with mid-20th century approaches that used tools like price and incomes policies. The episode examines various price control attempts during the pandemic, citing Spain's targeted subsidies as relatively effective and Hungary's broad controls as a failure. Blyth also mentions Germany's gas price brake as a successful large-scale intervention. Four competing narratives for the pandemic inflation surge are outlined: excessively stimulative fiscal and monetary policy, labor cost-push pressures, supply shocks, and corporate greed. Blyth references a San Francisco Fed paper estimating U.S. stimulus checks contributed between 0.9% and 3.2% to inflation. He highlights an ECB estimate that 40% of Eurozone inflation in 2022 stemmed from firms increasing their profit margins. The tone is conversational and educational, blending economic theory with historical examples and current policy analysis. This episode would appeal to listeners interested in macroeconomic policy, political economy, and critiques of mainstream economic narratives. Those seeking a purely technical or monetarist analysis of inflation might find the distributional and political focus less engaging.

As heard by us

Inflation is framed as distributional politics, not just a number.

Inflation is treated less like a chart and more like a fight over who pays. Mark Blyth and David Beckwith move from banking crisis politics to price controls and bank windfalls, then through the competing explanations for the pandemic inflation surge, keeping several causes in…

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If you want inflation explained through politics, competing stories, and bank windfalls, press play.

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