Some Lessons from the Great Inflations

From the mid-1960s through 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% (Rwanda). Two countries, Bolivia and Argentina, have average rates of more than 150% 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% to more than 15% in the years of peak inflation, 1970-82. (Federal Reserve Bank of St. Louis, 1990).