MPIfG Lecture

The dominant view of inflation is that it originates from macroeconomic imbalances. However, in times of structural shifts and large-scale economic change, sharp increases in specific important prices can have far-ranging implications for general price stability. Isabella Weber’s presentation will start from How China Escaped Shock Therapy, her book charting China’s early reform debates, when economists and policy-makers were grappling with the question of how to maintain price stability in the transition to a market economy. In the second part of her talk, she will lay out how her China research has led her to an analysis of today’s inflation that considers the systemic significance of certain prices for overall economic stability. Presenting results from input-output simulations conducted for the COVID-19 inflation in the US, she will illustrate why not all prices are created equal. In the concluding part she will reflect on what this alternative view of inflation implies for monetary theory and economic stabilization.

Recommended reading
Weber, Isabella M., Jesus Lara Jauregui, Lucas Teixeira, and Luiza Nassif Pires. 2022. “Inflation in Times of Overlapping Emergencies: Systemically Significant Prices from an Input-output Perspective.” Economics Department Working Paper Series 340. Economics Department, University of Massachusetts Amherst.

Isabella M. Weber is an Assistant Professor of Economics at the University of Massachusetts Amherst, an Associate in Research at the Fairbank Center, Harvard University, and currently a Berggruen Fellow at Peking University. Her first book, How China Escaped Shock Therapy: The Market Reform Debate, is the winner of the Joan Robinson Prize, the Keynes Prize, and the International Studies Association Best Interdisciplinary Book Award and has been recommended on best book of 2021 lists by the Financial Times, Foreign Policy, Project Syndicate, ProMarket, and Folha de S.Paulo among others. Isabella Weber has worked on policy responses to inflation and has advised policy-makers in the United States and Germany on questions of price stabilization. For this work she has been named on the Bloomberg 50 Ones to Watch, the Capital 40 under 40, and the Focus Germany’s top 100 women lists in 2022. For her work on China’s market reforms she has won the International Convention of Asia Scholars’ Ground-Breaking Subject Matter Accolade and the Warren Samuels Prize for Interdisciplinary Research in the History of Economic Thought and Methodology. Previously she was a tenured Lecturer at Goldsmiths, University of London, and has been the principal investigator of the ESRC-funded Rebuilding Macroeconomics project “What Drives Specialization? A Century of Global Export Patterns.” Isabella Weber holds a PhD in Economics from the New School for Social Research, New York, and a PhD in Development Studies from the University of Cambridge. German born, she studied at the Free University of Berlin and Peking University for her BA.