Source: "Comparing past and present inflation", Bolhuis et al. (2022) Bureau of Labour Statistics US inflation may be even worse than it seems. Average prices rose by 8.6% over the last year, which is the highest rise since 1981. Back in the 1970s and 80s there was a decade of high inflation which peaked at 14.8%. Some will take comfort in the fact that today's price rises are still well below this figure. However, comparisons of today's inflation with the past may be misleading, because the way inflation is measured was changed in 1983. If we recalculate historic inflation using the new methodology used today, we can see that price rises in the 70s and 80s were much lower. The 14.8% peak recorded in March 1980 was actually only 11.4%. While this is still higher than today, current inflation rates are getting close to a time known as 'the Great inflation'. This should be concerning to policymakers, because the policies used to bring down such high inflation rates usually result in slower economic growth, and even a recession, just like we saw back in the 80s. Check out the Shorts playlist for more videos like this! Subscribe for more videos looking at everything to do with the subject of economics. Put suggestions for video ideas in the comments section below and any feedback offered would be greatly appreciated. My videos are intended for educational and entertainment purposes. I try to credit the relevant parties for any work that I refer to in my videos (for example, citing relevant academic papers). If you believe a video does not observe good academic practice, please do not hesitate to contact me by email at everythingbetting@gmail.com