I thought this was funny. I’m not sure if Mankiw is making a joke about what Ken Rogoff thinks is a “dystopia” or whether he’s making a more general joke about how economists think, but either way I was amused.
(I have no opinion one way or another on the economic analysis. I just thought it was a funny use of the term “dystopia,” which I usually associate more with Mad Max than with inflation or tax increases. Actually, I thought some economists thought that a bit of inflation was a good thing?)