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William White, until recently economic adviser to the Bank for International Settlements
He has resisted heroically the temptation to say: “I told you so.”

“inflationary expectations”
William White, until recently economic adviser to the Bank for International Settlements
has resisted heroically the temptation to say: “I told you so.”
Samuel Brittan, Financial Times, August 14 2008

The words “inflationary expectations” ... appeared in academic debate as early as the 1970s and 1980s in relation to the so-called monetarist controversy.
The key contention of the monetarists was not about the need for money supply targets, as technocrats assumed, but that monetary policy rather than direct intervention in wage or price setting was the right method of tackling inflation.

Their opponents believed that this could only work by creating a slump in which millions would lose their jobs. The more thoughtful monetarists did not deny that there was a transitional cost in squeezing inflation out of the system.
But the severity of that cost would depend on how credible the policy was.

My own doubts centred on the advisability of pursuing inflation targets over as short a period as two years.
In the heyday of stable money under the Victorian gold standard, there were many years of 5, 6 or 7 per cent inflation and others when the price level actually dropped. But there was a general assumption that the value of money was unlikely to change very much over generations.
Short-term changes in the price level were a safety valve against shocks.

The comparative neglect of asset prices was for long condemned by William White, until recently economic adviser to the Bank for International Settlements, who argued that asset price bubbles could generate economic instability even if consumer price targets were being observed, as they were until recently. He has resisted heroically the temptation to say: “I told you so.”

Full text

Why have markets reached their exposed position?
The answer is that success breeds excess.
This is the argument of a fascinating new paper from William White,
Martin Wolf, Financial Times 24/5 2006

As William White of the Bank for International Settlement has noted,
banks almost always get into trouble together.
The most recent cycle of mad lending, followed by panic and revulsion, is a paradigmatic example.
Martin Wolf, FT February 5 2008