... the world. While the western hemisphere is in no way immune to the threat of inflation, it is true that high levels of inflation are much more widespread amongst developing countries where, as Agenor and Montiel (1996) show sustained inflation rates of over 25% have routinely appeared in no less than 54 countries across the world since 1965. They also identify a small group of 14 (mainly Latin American) countries, which have persistently dogged by "chronic inflation" from 1965-89. More recent examples include Argentina and Brazil in the 1990's. The effects of high levels can be devastating, with in almost all cases, huge corresponding falls in output, rises in unemployment and rises in government deficits as well as the obvious psychological harm and distress that it will cause the unfortunate members of the afflicted country. Stabilisation programs: Programs aimed to reduce these inflationary pressures are known as stabilisation programs and will ...

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