Today, I thought it might be appropriate for me to say a few words about the nature and causes of the accelerating inflation from which the world has recently been sufferinig, and in particular about any interrelationships that may exist between inflation and recent developments in the exchange rate system. A certain degree of price inflationi has been pervasive throughout the postwar period. Durinig the 1950's its importance seemed on the whole to be declining, but later the trenid was reversed. During the decade of the 1960's, national income deflators in the industrial countries rose, on the average, at an annual rate of 3.4 percent. While the rate of increase fluctuated somewhat, therc was a gradual tendency for inflationi to gather speed towards the end of the decade. For a year or two this tendency was checked by the recession of 1970 and 1971, but in the following years the acceleration was rapid indeed with price increases of over 7 percent in 1972 and almost 12 percent in 1973 and 1974. Developing countries have always, on the average, had higher rates of inflation than industrial countries, but the same trend is visible among them: their consumer price indices, which had risen at an average rate of 13 percent during the 196572 period, accelerated to 24 percent in 1973 and 35 percent in the early months of this year. During the 1950's anid 1960's those who

Edited by L.H. Klaassen, L.M. Koyck and H.J. Witteveen, Presented on the occasion of his 25 years jubilee as a professor at the Netherlands School of Economics at Rotterdam. (With a bibliography of professor Tinbergen's work).