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The Control of Inflation in a Small, Underdeveloped Open Economy — The Barbadian Experience

The recent phenomenon of galloping inflation simultaneous with rising unemployment has pro voked much thought among policy makers having to reconcile the coexistence and longevity of these two seemingly incompatible occurrences. Intensive investigation into the causes and nature of the slumpflation in the highly industrialised countries has elicited various policy prescriptions for its control. However, the problem of control assumes greater proportions in the context of a small, open, underdeveloped economy where the effects of inflation are even more disastrous and destabilizing. There is little wisdom in the indiscriminate applica tion of measures designed for the industrialised