... average annual rate of 1 to 2 per cent was modest by modern standards. Major changes occurred during the American War of Independence, when prices in the United States rose an average of 8.5 per cent per month, and during the French Revolution, when prices in France rose at a rate of 10 per cent per month. These relatively brief flurries were followed by long periods of alternating international inflations and deflations linked to specific political and economic events. By historical standards, the post World War II era has been characterised by relatively high levels of inflation in many countries, and by the mid-1960s a chronic inflationary trend began in most industrial nations. For example, from 1965 to 1978 American consumer prices increased at an average annual rate of 5.7 per cent, including a peak of 12.2 per cent in 1974. In Great Britain, inflation also peaked in 1974, following ...

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