The Economics Roundtable meets several times yearly under the sponsorship of UCSD Extension and the UCSD Economics department. The participants include leaders of the San Diego business community, professions, civic officers, business press, and UCSD faculty. He is well known on that committee as an inflation hawk, seeking policies to restrain inflation even at the short term cost of higher interest rates and moderate increases in unemployment. During 1994, when Dr. Parry was a voting member, the FOMC raised interest rates seven times, doubling short-term interest rates from February 1994 to February 1995. When aggregate demand in the economy is high enough to bring sustained output above these levels, then inflation results.
Inflation brings adverse effects on efficiency and on long term growth.
Doubling short term interest rates in 1994 was the policy to implement that slowing. We're seeing the results of that policy in 1995. Inflation has not accelerated. A central banker never tells. But the increases of 1994 may be enough.