Some Lessons from the Great Inflations

From the mid-1960s to the 1980s, the world experienced the most prolonged and widespread peacetime inflation in recorded history. For the years 1965–88, not a single country had a zero or negative average rate of inflation (World Bank, 1990). The lowest reported average rate is 2 per cent (Rwanda). Two countries, Bolivia and Argentina, have average rates of more than 150 per cent for the 23 year period, and 44 countries have average rates in double digits or above. In the seven major developed countries compound annual rates of inflation ranged from 5 per cent to more than 15 per cent in the years of peak inflation, 1970–82 (Federal Reserve Bank of St. Louis, 1990).