2008 PTSD VS THE GHOSTS OF THE 1970S. @darioperkins writes: While #SVB and its peers were uniquely exposed to COVID bubbles, this latest calamity has highlighted a broader problem in global banking – duration risk. At the start of the year, #centralbanks... 
wanted to keep monetary policy “tighter for longer”, with the aim of bringing inflation down in a controlled and gradual manner. Right now, they seem to be losing control of that process. As tensions build, banks – particularly the smaller ones – will restrict credit in a way...
that could have a devasting impact on #SMEs, with powerful knock-on effects to aggregate demand. This will help the authorities to defeat inflation, but in a way that is uncontrolled and intractable, risking unnecessary hardship. Central banks are in a difficult position...
caught between the (largely imagined) ghosts of the 1970s and their own PTSD from what happened in 2008. Our guess is that PTSD will ultimately win out. The only question is how long it takes and at what economic cost
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