The Case for Gradualism in Policies to Reduce Inflation

Inflation is usually defined as a sustained rate of increase in a broadly based index of prices. Whatever meaning one gives to the imprecise term "sustained," the past fifteen years seem to meet the standard. Both the all-item consumer price index and the implicit GNP deflator have increased in every quarter since late 1965, and neither seems likely to reach a zero rate of change in the near future.