ABSTRACT
The worldwide inflation of recent years has slackened off markedly in most countries over the last twelve months. However, even in such low inflation countries as Germany, it is still running at a rate which, a decade ago, would have been regarded as intolerably high. Moreover, the recent reduction in inflation rates has been achieved only at the cost of unemployment levels unprecedented in the postward period. It is far from clear that the current recession will anywhere be permitted to last long enough to bring inflation back to the levels of the early 1960s; indeed there are good reasons for believing that recovery from the current recession will be accompanied by an acceleration of inflation as demand is permitted to expand before the inflationary expectations generated over the last five years are completely removed from the system.
