There is a saying in Spanish: get burned by hot milk, and the sight of a cow makes you cry. New research implies that, decades after a populist government leaves office, the central bank it once tried to control is still flinching. Martín Uribe (Columbia) and Nicolás Magud (IMF) have investigated the long-run effect of populist governments that leaned on their central banks to print money and feed inflation. They find that these central banks raise interest rates more aggressively than others when inflation drifts above target, even decades later. This is the second of four episodes drawn from papers commissioned for the second Economic Policy: Papers on European and Global Issues conference, organised by CEPR, CESifo and Sciences Po.



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