ABSTRACT

The Acceleration of Inflation in the Late 1970s and Early 1980s

From 1979 until 1985 hyperinflation caused serious economic problems, the consequences of which are still being felt. It destroyed the normal operation of the price mechanism, and after 1980, it became the central issue in economic policy. The 1970s began with relatively low but accelerating inflation and ended with prices rising by more than 100 percent a year. By 1984 prices were rising at an annual rate of 445 percent (see Figure 2.1).