Planet Money
Planet Money

Our mission: Find the world’s best economic ideas (Summer School World Tour)

July 8, 2026

AI Summary

5 min read

The world’s first inflation target—the 2% number that central banks from the US to the UK now treat as gospel—was invented by a jazz musician in New Zealand who had never heard of such a thing. Arthur Grimes, a saxophonist and economist, was sent on a world tour in the 1980s to find a way to fix his country’s runaway inflation. He came back with an idea so simple it seemed radical: instead of targeting how much money was printed or what interest rates should be, just target the inflation rate itself. Tell everyone the number, and then make the economy hit it. That idea, born in a small country at the bottom of the world, now shapes how central banks from Washington to London manage the global economy.

Water Markets and the Problem of Scarcity

Continue reading the full summary in the app — free to try.

Read Full Summary →

Free • No credit card required

Listen to Audio Summary Open in App

What you'll learn

  • 1 (00:30) **Introduction: The Summer School World Tour** - Robert Smith launches the season, promising a semester abroad studying economic ideas from around the world.
  • 2 (02:37) **Why Study Other Economies?** - Professor Justin Wolfers explains that other countries are "laboratories" for different economic policies.
  • 3 (06:00) **Case Study 1: Australia's Water Market** - The episode examines how Australia, the driest inhabited continent, uses a market to allocate water.
  • 4 (08:58) **How the Water Market Works** - The government sets a cap on total water use, and farmers can buy and sell their allocated shares.
  • 5 (11:01) **The Downside: Water Flippers and Protests** - During a 2019 drought, water prices spiked from $100 to $1,000 per megalitre.
  • 6 (13:03) **Lessons from the Water Market Review** - The government's review was positive about the system but offered three key lessons.
  • 7 (15:00) **Professor Wolfers on Markets and Scarcity** - Justin explains that markets solve the "tragedy of the commons" by reallocating resources to their best possible uses.

+ Full timestamped outline available in the app

Show Notes

Come along as we travel the world in search of the best economic ideas to bring home!

From the beaches of Barbuda to the fjords of Norway, there's money (and money problems) everywhere. For this summer travel season, Planet Money Summer School will take you on a world tour for your ears. Pack that sense of wonder and nose for adventure, this is our semester abroad. We’re going to explore exotic locales and discover cultural norms, but we’re also going to buckle down and learn the biggest economic lessons around the world from our guides.

We start as far away as you can get from Planet Money headquarters, New Zealand and Australia. We’ll visit a sheep farm to observe an innovative but controversial market for the most important substance on earth, and we’ll ask when do speculators help and when do they hurt the rest of us? Then, we’ll get to know the economist – and jazz musician – who changed how the entire world fights inflation when he released a secret number to tame the dreaded wild beast. How did that work? Spoiler: it was the great leap forward in economic mind tricks.


Featured Episodes:

Featured Terms:
  • Multiple equilibria
  • Inflation targeting
  • Speculators (impact on liquidity)
Support:

Read: 
Follow: 

This episode of Planet Money Summer School is hosted by Robert Smith. It was produced by Sophia Paliza-Carre, fact-checked by Sierra Juarez, and engineered by Annlie Huang with help from Robert Rodriguez.

Music: NPR Source Audio - "The Boy from Ipanema," "Desmontes," "Long Drive,” and “Bondi.”


See Planet Money

More from this podcast

 Planet Money →