As an example of how even excellent economists can get assessments wrong, Professor Rogoff could have mentioned that The Times account of his August 2008 speech included the paragraph: "The professor also sounded a warning over rising US inflation, which rose last month to its highest since 1991, and criticised the Federal Reserve for having cut American interest rates too drastically. “Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States,” he said." Given the lags in the effects of interest rates on output and then inflation, in retrospect the 'drastic' cut in US interest rates turned out to be a much better policy than the delayed response by other central banks.
Blaming the Fed
As an example of how even excellent economists can get assessments wrong, Professor Rogoff could have mentioned that The Times account of his August 2008 speech included the paragraph:
"The professor also sounded a warning over rising US inflation, which rose last month to its highest since
1991, and criticised the Federal Reserve for having cut American interest rates too drastically. “Cutting
interest rates is going to lead to a lot of inflation in the next few years in the United States,” he said."
Given the lags in the effects of interest rates on output and then inflation, in retrospect the 'drastic' cut in US interest rates turned out to be a much better policy than the delayed response by other central banks.