ABSTRACT
Inflation at a very high rate, or even at a moderate rate for a long period of time, is closely linked to socio-political crisis. This is most obvious in Third World countries. But it is also increasingly apparent in the case of industrialized countries, particularly when inflation can only be regulated at the substantial cost of high unemployment and the under-utilization of production capacity. Economic advisors and political leaders seem powerless to deal with such a situation. In any case, they have failed thus far to come up with a coherent counter-inflationary strategy which is effective as well as politically sustainable over the long-run.
