rapidly passed on in lower prices; increased demand sometimes caused spectacular increases in prices. Arthur Lewis' studies4 have shown that the huge improvements in sugar cultivation brought no beneflt to the farmer or planter, since prices feil as fast and fully in proportion to the rise in yields per acre. It is this combination of highly competitive primary product prices and rigid industrial prices which was characteristic of the 20s and 30s of this Century, and no doubt contributed to the severity of the Depression after 1929. World War I ushered in an inflation the whole world over which came to an end with a bang in Britain in 1921, and in other leading industrial countries in various years up to 1925. From then on prices were stable or gently falling, until the Great Depression which brought primary product prices crashing down, and made industrial prices moderately lower. Althought the experience of individual countries differed a great deal I think one can say that the inter-war period was on the whole another period characterised by falling rather than rising prices. As against that the experience of the post World War II period was a very different one. The much-heralded post-war recession which wrought such havoc after World War I did not materialise. For a time it looked like Coming at around 1949, but then the outbreak of the Korean war brought an end to this, and ushered in a unique period of prosperity and industrial expansion marked by a steady creeping inflation in all industrial countries, combined with a remarkable stability of raw material prices on the average (many individual commodities tended to fluctuate up and down but in the average the level of prices in 1970 was the same as in 1950). Industrial growth in the U. S. and U. K. owed a great deal to heavy armament expenditure after 1951; in Japan, Italy and Germany on the other hand to an unprecedented export boom in steel, machinery, ships, motor cars, chemicals and many other commodities. But it meant continued füll employment in Britain, and to a lesser degree in the U. S., and an unprecedented expansion of employment (particularly industrial employment), through immigration from abroad or the countryside in Germany, Italy and Japan. (Fast growing countries had on the whole a higher rate of creeping inflation than the slow growing ones.) However, since the early 1970s we have entered a new phase of far more rapid inflation - a world wide inflation which has had no previous precedent in peace-time either in its wide-spread nature or in its amplitude, combined with relatively stagnant Output and sharply rising unemployment. Manufacturing Output in Britain in December 1980 was no higher than it was in 1967 (and it is 21 per cent lower than the peak Output in 1973). In the course of 1980 alone there was an unprecedented fall in Output of 15 per cent. In other leading industrial countries (with the exception of the U. S.) progress has slowed down to around 2 per cent a year (as against a customary 5 per cent in the 1950s and 1960s) though in contrast to Britain Output has not actually fallen. World commodity prices stopped rising in 1974 and then feil for a time; then 291