The 1946-48 inflation

 In Hazlitt '57 I said

Samuelson and Solow in 1960 found that inflation troubling: They describe "the rather puzzling phenomenon of the 1955-58 upward creep of prices". I keep bringing this up to emphasize that the cost-push problem goes back at least to the 1950s.

 I want to go back now and quote the whole first paragraph from S&S 1960:

Just as generals are said to be always fighting the wrong war, economists have been accused of fighting the wrong inflation. Thus, at the time of the 1946-48 rise in American prices, much attention was focused on the successive rounds of wage increases resulting from collective bargaining. Yet probably most economists are now agreed that this first postwar rise in prices was primarily attributable to the pull of demand that resulted from wartime accumulations of liquid assets and deferred needs.

I think that's right. After the war a lot of people had some money saved up, and were in the mood to spend. So, demand-pull rather than cost-push.

Recently, I found a little more about the late-1940s inflation. From The Monetary Hawks by Michael McCarthy, at Jacobin:

After wage and price controls were lifted in the wake of World War II, inflation jumped up from 8.5 percent in 1946 to 14 percent in 1947. At the time, many in Congress argued that a key cause was the spread of industry-wide union contracts that included wage increases.

McCarthy doesn't argue that those congressmen were right. But he does fill in a blank for me, better than Samuelson and Solow do with the words "much attention".

 Couple days after I wrote the above, I found a graph I did in 2017. This graph:

Graph #1: Quarterly Data Suggesting Times of Stagflation. Early 1970s rung up.

At the time I was looking for stagflation before the oil crisis of 1973. But when I found the graph just now I noticed the blue indicators of stagflation in the 1955-58 period that Samuelson and Solow thought might have been a time of cost-push inflation, and one around 1952. And right at the start of the graph, for what looks like two or three quarters of 1947, the combination of inflation and slow growth. 

So there is some justification for the "wrong war" view Samuelson and Solow observe in the 1946-48 period.

The graph is crude at best. But being as how I found it, I figured I'd add it to this post in case I look to this post at some future date for stagflation in the 1940s. Also this graph,

Graph #2: Annual Data Suggesting Times of Stagflation

which indicates stagflation in the 1890-1920 period, and then not again until after the Second World War. 

I had to look: Thomas Philippon's graph shows finance high and rising from 1890 to 1920. From 1920 to 1945 about, where no stagflation is indicated here, Philippon shows increase to about 1932, then decrease to the end of the war. And since the mid-1940s Philippon shows increase again, and my graph has indications of irregular but recurring stagflation.

And then, there's this:

If you zoom in to see it (at the Ngram viewer) there is a little activity beginning around 1860. But for the most part, nothing until the late 1940s. Then quite a lot, soon after. With red peaks in 1961 and 1973, before Volcker.

Little concern about cost-push these days. People say there is no cost-push problem.

What do they know.