The Commitment to Permanent Inflation
A period of remarkable economic stability ended in 1965. The United States experienced over twenty years a solid expansion of output and employment, in contrast to the gloomy predictions made at the end of the second world war. Bursts of inflation in 1951-1952and 1955-57 were successfully contained by com paratively cautious financial policies. This heritage of a determined anti-infla tionary policy was reenforced under the Kennedy Administration by an essen tially modest and stable course of monetary and fiscal affairs. The price level re mained practically constant and interest rates reflected the absence of inflation. The prime rate stayed around 4.5 per cent until the middle of the 1960s.