ABSTRACT
What did not happen is almost more important than what did in interpreting the currency history of the decade or so that followed the 1974-75 recession. The newly floating currencies showed occasional swings of an order which could be explained only by fear of economic or political adversity far greater than what was subsequently experienced. Examples include the fear of runaway inflation in Britain ($/£1.56, October 1976), of high inflation and energy crisis in the USA (DM/$1.73, Sfr/ DMO. 72, September 1978), of an ever·rising spiral of world oil prices ($/ £2.42, October 1980), and of neutralism in the Federal Republic and economic sclerosis in Europe (DM/ $3.45, February 1985).
