Friedrich A. Hayek Professor of Economic History, University of Missouri – St. Louis:

Associate Editor, Economic Modelling, from 2020.

Repec https://ideas.repec.org/e/pgi22.html

Orcid https://orcid.org/0000-0002-5536-4608

The Spectre of Price Inflation:
by Max Gillman
December 8, 2022: Agenda Publishing UK ebook available


“Yet again, inflation has returned. Rather than searching for historical parallels, this book provides an extremely important exploration that links the past to contemporary inflation. This is an extremely useful book for central bankers, macroeconomists and readers who wish to deepen their understanding of the causes – and effects – of inflation.” – Elisa Newby, Bank of Finland

“Central bankers of the world are hereby put on notice: Based on impeccable scholarship, Max Gillman’s devastating indictment of their policies explains why distortionary interest rates impose severe damage on economies by misallocating the financial investment resources needed to fuel productive growth. He makes a compelling case against the Federal Reserve’s price-fixing approach to determining the cost of capital – and illuminates the unhealthy relationship between the Fed and the US Treasury Department. Gillman’s analysis will be riveting for monetary policy experts, even as it will prove eye-opening for non-specialists who have long sensed that government-engineered inflation and manipulated money betray the principles of democratic capitalism.” – Judy L. Shelton, Senior Fellow, The Independent Institute, former Chairman of the National Endowment for Democracy, and former US Director of the European Bank for Reconstruction and Development

“Professor Gillman’s book is important and ambitious. Since the link between money and gold was broken in 1971, the world’s major economies have suffered repeated inflation outbreaks. Why? Gillman asks this fundamental question – and insists, against the latest fashions, that the behaviour of the quantity of money is crucial to the answer. His views are challenging, thought-provoking and central to current debates on economic policy.” – Tim Congdon, Chair and Founder of the Institute of International Monetary Research

“This is a thought-provoking journey through monetary and financial history, asking how we got into some of our current monetary messes and banking binds; and wondering how our forebears have helped or hindered us in getting here.” – Charles Nolan, University of Glasgow

“An insightful journey through the history of inflation and its master, the Central Bank. Gillman explains how the Fed suppressed inflation, flooding the financial system with money since 2008 and imposing significant distortions. This equilibrium has now ended to the relief of Chicago-trained Gillman and all of us who believe that the fundamental principles of economics still work.” – Lorenzo Forni, University of Padova and author of The Magic Money Tree and Other Economic Tales

“Inflation is back, and this book is a timely account of how this happened and how it can be cured. On the way Professor Gillman provides a learned history of the origins and development of money across the world since the very beginnings of the ancient world.” – Patrick Minford, Cardiff Business School

February 2023 in US: Columbia University Press:

The Spectre of Price Inflation, Max Gillman, Columbia University Press, US; Newgen Publishing, UK; for Agenda Publishing, 2022.


Publisher Description:

Inflation, hyperinflation and deflation have all had profound effects on societies, especially during periods of war and crisis. Today’s approach to managing inflation has been shaped by these episodes and informed by debates between different schools of economic thought from Fisher and Hayek to Keynes and the monetarists. This accessible and authoritative overview explores the role of inflation in the modern economy, from its place in monetary policy and in money supply to its effects on everyday business.

In a compelling analysis, the book shows that since the financial crisis in 2008–09, inflation rates have remained persistently higher than interest rates worldwide, which is the inverse of our basic understanding of how inflation normally affects markets. The result of this inversion has been that the effective real return on investment has become negative, and consequently, the investment rate has dropped across western economies. At a time when inflation once again challenges the world’s leading economies, the book offers valuable insight into the monetary policy of central banks.



Part I: Innocence: when principles guided policy

1. Drs Fisher, Friedman and no inflation

2. The rise of inflation

3. The end of metal for money

4. War, peace, deflation and recession

5. Seigniorage versus hyperinflation

6. Blaming the victim

7. Inflation and unemployment

Part II: Ignominy: central banks, insurance and inflation

8. The rise of central banks

9. Fractured insurance

10. Bank failure and crisis

11. The problem of excess reserves

12. Giving away the inflation tax

Part III: Purgatory: capital markets, interest and inflation

13. Fed price-fixing

14. A plague of negative interest rates

15. Shifting money demand

16. The new usury prohibition?

17. Money, inflation and banking reform

Research Papers: Revise and Resubmit

“Explaining Real Business Cycles with Human Capital Investment,” with Szilard Benk, Tamas Csabafi, Jing Dang, and Michal Kejak; Journal of Human Capital.

“Interest Rates with Optimal Inflation Tax Avoidance”,  with Tamas Csabafi, Ceri R. Davies, Michal Kejak; JMCB

Max Gillman, Tamas Csabafi, Ceri R. Davies, Michal Kejak, 2020, “Estimation of Interest Rates in Alternative Frequency Windows using Simulated Data”; with Tamas Csabafi, Ceri R. Davies, and Michal Kejak.

“Nominal Interest Rates and Inflation Rate Inversion: Bank Shocks and the Great Recession”, with Tamas Csabafi, Ceri Davies, and Michal Kejak; CEP.


“Gold, Silver, and the US Dollar as Harbingers of Financial Calm and Distress;” 2022, Sel Dibooglu, Emrah I. Cevik, Max Gillman; Quarterly Review of Economics and Finance; vol. 86, November, p. 200-210.
DOI: https://doi.org/10.1016/j.qref.2022.07.003

50 day access: https://authors.elsevier.com/a/1fWAT3niMPrnsj

“Lucas’s Methodological Divide in Inflation Theory: A Student’s Journey”, 2022, by M. Gillman, Journal of Economic Methodology, Volume: 29, Issue 1, pages 30 – 47. DOI:10.1080/1350178X.2021.2019818; https://ideas.repec.org/a/taf/jecmet/v29y2022i1p30-47.html

“Macroeconomic Trends among Visegrad Countries, EU Balkans, and the U.S.”, 2021, Central European Business Review, Special Issue “Transition in Central Europe and the Balkans since the Fall of the Wall;” June; Edited by M. Gillman. https://ideas.repec.org/a/prg/jnlcbr/v2021y2021i2id282p1-20.html

“Steps in Industrial Development through Human Capital Deepening,” 2021, Max Gillman, Economic Modelling, volume 99, June, article no. 105470; https://ideas.repec.org/a/eee/ecmode/v99y2021ics0264999321000456.html

Max Gillman, 2021. “Income Tax Evasion: Tax Elasticity, Welfare, and Revenue”, International Tax and Public Finance, volume 28, pages 533–566. https://ideas.repec.org/a/kap/itaxpf/v28y2021i3d10.1007_s10797-020-09632-3.html

“Granger Predictability of Oil prices after the Great Recession”, 2020, Journal of International Money and Finance; with Szilard Benk; Volume 101, March, Article No. 102100. https://ideas.repec.org/a/eee/jimfin/v101y2020ics0261560619301305.html

““The Welfare Cost of Inflation with Banking Time”,” 2020, BE Press Journal of Macroeconomics: Advances; volume 20, Issue 1; https://ideas.repec.org/a/bpj/bejmac/v20y2020i1p20n18.html

“International Business Cycle and Financial Intermediation”, 2019, Journal of Money, Banking and Credit, with Tamas Csabafi and Ruthira Naraidoo, Vol. 51, No. 8 (December), pp. 2293-2303; https://ideas.repec.org/a/eee/jimfin/v101y2020ics0261560619301305.html

Dynare/Matlab Codes: “International Business Cycle and Financial Intermediation”, 2019, Journal of Money, Banking and Credit. Dynare/Matlab Codes International Business Cycle and Financial Intermediation

Technical Appendix, 2020, to “International Business Cycle and Financial Intermediation”, Journal of Money, Credit and Banking, Vol. 51,
No. 8 (December), pp. 2293-2303. https://ideas.repec.org/p/msl/workng/1017.html Working Papers 1017, University of Missouri-St. Louis, Department of Economics.

“Hyperbolic discounting and growth without commitment: On the resolution of time inconsistency under continuous time”, 2017, Manchester School, Volume 85, Issue S2, December, pages e45–e74, with Christopher Tsoukis and Frédéric Tournemaine, https://ideas.repec.org/a/bla/manchs/v85y2017is2pe45-e74.html

Principles of Macroeconomics: An Evolutionary Approach, 2017. Kendall Hunt Publishing. Link to publisher.

“Learning about Rare Disasters: Implications For Consumption and Asset Prices”, 2015, Review of Finance, 19 (3, May): 1053-1104, with Michal Kejak, and Michal Pakoš. https://ideas.repec.org/a/oup/revfin/v19y2015i3p1053-1104..html

“Tax Evasion, Human Capital, and Productivity Induced Tax Rate Reduction”, 2014, Journal of Human Capital, 8(1, Spring): 42-79, with Michal Kejak. https://ideas.repec.org/a/ucp/jhucap/doi10.1086-675328.html

Collected Papers on Monetary Theory; by Robert E. Lucas Jr.; 2013, Harvard University Press; edited by M. Gillman, Max. https://ideas.repec.org/b/hup/pbooks/9780674066878.html

 “Inflation, Human Capital and Tobin’s q”, 2012. Journal of Economic Dynamics and Control; Volume 36, Issue 7, July, Pages 1057–1074; with Parantap Basu and Joseph Pearlman. https://ideas.repec.org/a/eee/dyncon/v36y2012i7p1057-1074.html

Max Gillman and Michal Kejak, 2011, “Inflation, Investment and Growth: a Banking Approach”, Economica, 78 (310: April) 260–282. https://ideas.repec.org/a/bla/econom/v78y2011i310p260-282.html

Max Gilman, 2011 Advanced Modern Macroeconomics: Analysis and Application; Pearson Education. https://www.pearson.com/uk/educators/higher-education-educators/program/Gillman-Advanced-Modern-Macroeconomics-Analysis-and-Application/PGM1022188.html?tab=overview

Max Gillman and Mark Harris, 2010, “The Effect of Inflation on Growth: Evidence from a Panel of Transition Countries”, Economics of Transition, Volume 18, Issue 4, pages 697-714, October. https://ideas.repec.org/a/bla/etrans/v18y2010i4p697-714.html

Helmuts Azacis and Max Gillman, 2010, “Flat Tax Reform: The Baltics 2000-2007”, Journal of Macroeconomics, 32 (2, June) pp. 692-708. https://ideas.repec.org/a/eee/jmacro/v32y2010i2p692-708.html

Szilard Benk, Max Gillman and Michal Kejak, 2010, “A Banking Explanation of the US Velocity of Money: 1919-2004”, Journal of Economic Dynamics and Control, 34 (4, April): 765–779. https://ideas.repec.org/a/eee/dyncon/v34y2010i4p765-779.html

Max Gillman, 2010, `Comment on “Price Stability and the Case for Flexible Exchange Rates”‘, Open Economies Review: 21 (February, 1): 17-21. https://ideas.repec.org/a/kap/openec/v21y2010i1p17-21.html

Max Gillman and Anton Nakov, 2009, “Monetary Effects on Oil and Gold Prices”, North American Journal of Economics and Finance, 20 (December, 3): 239-254. https://ideas.repec.org/a/eee/ecofin/v20y2009i3p239-254.html

Max Gillman, 2009, “International Deposit Insurance”, Economic Affairs, 29(3, September): 103-104. https://ideas.repec.org/a/bla/ecaffa/v29y2009i3p103-104.html

Max Gilman, 2009, Inflation Theory in Economics: Velocity, Cycles and Growth; Routledge; UK. https://www.routledge.com/Inflation-Theory-in-Economics-Welfare-Velocity-Growth-and-Business-Cycles/Gillman/p/book/9780415864817

S Benk, M Gillman, and M Kejak, 2008, “Money Velocity in an Endogenous Growth Business Cycle with Credit Shocks”, Journal of Money, Credit, and Banking, Vol. 40, No. 6 (September 2008):1281-1293. https://ideas.repec.org/a/mcb/jmoncb/v40y2008i6p1281-1293.html

M Gillman and G. Otto, 2007, “Money Demand in General Equilibrium Endogenous Growth: Estimating the Role of a Variable Interest Elasticity”, Quantitative and Qualitative Analysis in Social Sciences (QASS). Vol. 1 (1), Spring, 1-25. https://ideas.repec.org/p/cdf/wpaper/2006-24.html

M Gillman, 2007, Inflation and Economic Growth: Phillips Curve versus Inflation Tax Behaviour, Quarterly Economic Bulletin, Julian Hodge Institute of Applied Macroeconomics, November.

Simon Feeney, Max Gillman, and Mark N Harris, 2006, “Corporate Effective Tax Rates in a Single Taxation Country: Australia”, Accounting Research Journal, Vol. 19, No.1: 64-73. https://ideas.repec.org/p/cdf/wpaper/2005-16.html

Cziraky, Dario, and Max Gillman, 2006, “Money Demand in an EU Accession Country: A VECM Study of Croatia”, Bulletin of Economic Research, Vol. 58, No. 2 (April): 73-159. https://ideas.repec.org/a/bla/buecrs/v58y2006i2p105-127.html

Gillman, Max, and Oleg Yerokhin, 2005, “Ramsey-Friedman Optimality with Banking Time”, BEPress Journals in Macroeconomics, Topics in Macroeconomics, Vol. 5, No. 1, Article 16; http://www.bepress.com/bejm/topics/vol5/iss1/art16. https://ideas.repec.org/a/bpj/bejmac/vtopics.5y2005i1n16.html

Benk, Szilard, Max Gillman and Michal Kejak, 2005, “Credit Shocks in the Financial Deregulatory Era: Not the Usual Suspects”, Review of Economic Dynamics, Vol 8, No. 3 (July): 668-687. https://ideas.repec.org/a/red/issued/v8y2005i3p668-687.html

Benk, Szilard, Max Gillman and Michal Kejak, 2005, “A Comparison of Exchange Economies within a Monetary Business Cycle”, The Manchester School, Vol 73, No. 4 (July): 542-562. https://ideas.repec.org/a/bla/manchs/v73y2005i4p542-562.html

Gillman, Max, and Michal Kejak, 2005, “Contrasting Models of the Effect of Inflation on Growth”, Journal of Economic Surveys, Vol. 19, No. 1 (February): 113-136. https://ideas.repec.org/a/bla/jecsur/v19y2005i1p113-136.html

Gillman, M. and Michal Kejak, 2005, ” Inflation and Balanced-Path Growth with Alternative Payment Mechanisms”, Economic Journal, Vol 115, No. 500 (January): 247-270. https://ideas.repec.org/a/ecj/econjl/v115y2005i500p247-270.html

Gillman, Max and Anton Nakov, 2004, “Granger Causality of the Inflation-Growth Mirror in Accession Countries”, Economics of Transition, Vol 12, number 4 (December): 653-682. https://ideas.repec.org/a/bla/etrans/v12y2004i4p653-681.html

Gillman, Max, and Michal Kejak, 2004, “The Demand for Bank Reserves and Other Monetary Aggregates”, Economic Inquiry, July, 42(3): 518-533. https://ideas.repec.org/a/oup/ecinqu/v42y2004i3p518-533.html

Gillman, Max, Mark Harris, and Laszlo Matyas, 2004, “Inflation and Growth: Explaining the Negative Effect”, Empirical Economics, Vol 29, No. 1, (January): 149-167. https://ideas.repec.org/a/spr/empeco/v29y2004i1p149-167.html

Gillman, Max, and Anton Nakov, 2003, “A Revised Tobin Effect from Inflation: Relative Input Price and Capital Ratio Realignments, US and UK, 1959-1999”, Economica, Vol 70, No. 279 (August): 439-451. https://www.researchgate.net/publication/237241116_A_Revised_Tobin_Effect_from_Inflation_Relative_Input_Price_and_Capital_Ratio_Realignments_US_and_UK_1959-1999

Gillman, Max, 2002, “On Keynes’s Theory of the Aggregate Price Level in the Treatise: Any Help for Modern Aggregate Analysis?,” European Journal of the History of Economic Thought, Vol.9, No.3 (September): 430-451. https://ideas.repec.org/a/taf/eujhet/v9y2002i3p430-451.html

Gillman, Max, 2000, “On The Optimality of Restricting Credit: Inflation-Avoidance and Productivity”, Japanese Economic Review, Vol. 51, No. 3 (September): 375-390. https://ideas.repec.org/a/bla/jecrev/v51y2000i3p375-390.html

Gillman, Max, 1999, “The Problem of Social Cost: the Role of the State”, International Journal of Social Economics, Vol. 26, No. 5, pp. 590-595. https://www.emerald.com/insight/content/doi/10.1108/03068299910215898/full/html

Gillman, Max, and James Hogan, 1999, “Extending Corporate Liability in New Zealand”, International Journal of Social Economics, Vol. 26, No.4, pp. 487-500. https://www.emerald.com/insight/content/doi/10.1108/03068299910215951/full/html

Gillman, Max, 1998, “The Optimality of a Zero Inflation Rate: Australia”, The Australian Economic Review; Vol.31, No.3 (September): 211-223. https://ideas.repec.org/a/bla/ausecr/v31y1998i3p211-223.html

Gillman, Max, Pierre Siklos and J.Lew Silver, 1997, “Money Velocity with Costly Credit”, Journal of Economic Research, 2 (November): 179-207. https://ideas.repec.org/p/mlb/wpaper/515.html

Gillman, Max, 1995, “A Comparison of Partial and General Equilibrium Estimates of the Welfare Cost of Inflation”, Contemporary Economic Policy, vol 13, No 4 (October): 60-71. https://ideas.repec.org/a/bla/coecpo/v13y1995i4p60-71.html

Gillman, Max, and Tim Eade, 1995, “The Development of the Corporation in England, with emphasis on Limited Liability”, International Journal of Social Economics, vol 22 (April): 20-32. https://www.emerald.com/insight/content/doi/10.1108/03068299510084582/full/html

Gillman, Max, 1993, “The Welfare Costs of Inflation in a Cash in Advance Model with Costly Credit”, Journal of Monetary Economics, vol.31, no.1 (February): 97-116. https://ideas.repec.org/a/eee/moneco/v31y1993i1p97-115.html


Ph.D. The University of Chicago, Economics Department;

A.M: The University of Chicago, Economics Department;

A.B. The University of Michigan, with Distinction, High Honors in Economics; Mathematics double major.

Research Agenda:

Modeling money and banking in general equilibrium. Monetary economics, real business cycles, economic growth, and how money and banking influence cycles, growth, and asset prices.


See amazon homepage link

2022, The Spectre of Inflation: Innocence, Ignominy, and Purgatory; Agenda Publishing, forthcoming.

2017 Principles of Macroeconomics: An Evolutionary Approach, Kendall Hunt Publishing, Dubuque, Iowa; by Max Gillman

2013 Collected Papers on Monetary Theory by Robert E. Lucas, Jr., Harvard University Press; editor Max Gillman.

2011 Advanced Modern Macroeconomics: Analysis and Application, Pearson UK, Financial Times Press; by Max Gillman

2009, Inflation Theory in Economics: Welfare, Velocity,Growth and Business Cycles, Routledge International Studies; by Max Gillman

Contact: gillmanm@umsl.edu  Office Phone: 314-516-5861

Standing next to Wolfgang Stolper of the Stolper-Samuelson Theory of International Trade, University of Michigan Economics Honors Group photo. US Senator Chuck Schumer’s brother standing on the other side of me.

a rise in the relative price of a good will lead to a rise in the real return to that factor which is used most intensively in the production of the good, and conversely, to a fall in the real return to the other factor.