The era of the Great Moderation, with okay growth and low 2% inflation, is over.

Judge as of 2022-10-25. The claim is that the Great Moderation regime (stable growth with inflation around 2%) has ended. True: in October 2022, inflation was well above 2% and persistent (for example US and euro-area CPI at 8–10%), with heightened macro volatility, and economists or central banks widely described the low-inflation, stable-growth era as over or ended. Mostly true: the conditions hold, but there is notable debate about whether the change is lasting, while the claim's description of the regime is accurate. Mixed: inflation was elevated, but mainstream sources largely expected a return to the roughly 2% regime, so the claim of an end is contested about evenly. Mostly false: the conditions were only temporary or mild, and most authoritative sources rejected the idea of a regime break. False: inflation and volatility were in fact low and stable at the time.

Set before the research began.

1. E1 [PDF] Reflections of macroeconomic policy since 1995, from NICE to VICE Bank for International Settlements (speech by Lesetja Kganyago, Governor of the South African Reserve Bank) · 28 September 2022

   “Just over a decade ago, it was common to talk about a Great Moderation in global macroeconomic conditions. Mervyn King, a former Bank of England Governor, called it the NICE period: an acronym for Non-Inflationary, Consistently Expansionary. Today it would be more appropriate to talk about VICE: a Volatile, Inflationary and Contractionary Economy.”

2. E2 Consumer price index September 2022: - CNBC CNBC · 13 October 2022

   “On a 12-month basis, so-called headline inflation was up 8.2%, off its peak around 9% in June but still hovering near the highest levels since the early 1980s.”

3. E3 A new concept for reserve management - OMFIF OMFIF (Official Monetary and Financial Institutions Forum) · 25 July 2023

   “However, 72% of survey participants also think that the period of the ‘great moderation’ is over and that we might experience more volatile business cycles going forward.”

4. E4 Euro area annual inflation up to 10.7% - European Union Eurostat (statistical office of the European Union) · 31 October 2022

   “Euro area annual inflation is expected to be 10.7% in October 2022, up from 9.9% in September according to a”

As of October 2022, inflation was well above 2%. US headline CPI was 8.2% year on year in September 2022, near its highest levels since the early 1980s (E2), and euro-area inflation was 9.9% in September (E4). The South African Reserve Bank governor said in a BIS-published speech that the Great Moderation ("NICE") had given way to a "Volatile, Inflationary and Contractionary Economy" (E1). A 2023 OMFIF survey found that 72% of respondents thought the Great Moderation was over (E3), which suggests broad but not unanimous agreement on whether the change is lasting.