industrial relations policies. Former colonies or politically dependent territories either build on or reject inherited systems as soon as they are free to do so; most continue to be influenced by them. The choice is usually far from easy. Inheriting a repressive system is likely to produce an initial consensus on policy between government and trade union elements built on resistance to a common enemy. Sustaining such an alliance in changed political circumstances may be difficult when government is required to act in matters that unions perceive as against their interests. Inheriting a nonrepressive system may have the effect of depriving government of an institutionalized labor response. In either event, adjustment, especially in unfavorable economic circumstances, is likely to cause problems exacerbated by local labor behavior, the inexperience of local management, the presence of multinationals, and the impact of industrialization strategies. "Shared understandings" in any system take time to develop, and relationships easily become sour. Moreover, most developing countries are likely, initially at least, to base their economic futures upon the existence of cheap labor and low costs. Some find it difficult to proceed beyond such a stage and find themselves pursuing policies of cost containment, which are, or appear to be, repressive. Alternatively, as in some Southeast Asian economies, low-cost developments are followed by high-technology based on foreign investment, which demand policies based on skill development, training, and education and consequent higher levels of remuneration, which may not be matched in other sectors of the economy.
There has been all to little study of industrial relations policies in developed countries; the developing world has been subject to practically no study at all.
A. I. MARSH
Deyo, Frederick, 1989. Beneath the Labour Miracle: Labour Subordination in East-Asian Development. Berkeley: University of California Press.
Dunlop, John T., 1958. Industrial Relations Systems. New York: Holt.
Ferrier, Anthony, and Richard Hyman, 1992. Industrial Relations in the New Europe. Oxford: Blackwell.
Kerr, Clark, John T. Dunlop, Frederick Harbison, and Charles A. Myers , 1964. Industrialism and Industrial Man. New York: Oxford University Press.
Purcell, John, 1991. "The Rediscovery of the Management Prerogative: The Management of Industrial Relations in the 1980s", Vol. 17, no. 1: 41.
Sharma, Basu, 1985. Aspects of Industrial Relations in ASEAN. Institute for Asian Studies.
Southall, Roger, ed. 1988. Labour and Unions in Asia and Africa. Hong Kong: Macmillan.
Storey, John, ed. 1992. Developments in the Management of Human Resources: An Analytical Review. Oxford: Blackwell.
Strauss, George, 1994. "Reclaiming Industrial Relations Academic Jurisdiction". In Paula B. Voos, ed., Industrial Relations Research Association Series, Procedings of the 46th Annual Meeting. January 3-5, 1994, Boston, pp. 1-11.
Taylor, Robert, 1993. The Trade Union Question in British Politics. Oxford: Blackwell.
INFLATION . A generalized rise in prices, when the prices of most, if not all, goods and services increase simultaneously. This can be contrasted to a relative price increase, in which the price of a particular product, such as oil, or a particular service, such as health care, rises relative to other goods and services. Since goods and services are priced in terms of money, inflation lowers the value, or purchasing power, of money.
There are a number of standard indexes that are used to track inflation. One of the most commonly used is the consumer price index, which measures changes in the prices of a fixed basket of consumer goods and services. This basket varies across countries and over time. For instance, United States consumers have different spending patterns than Japanese consumers, and these differences are reflected in the composition and weights in each country's consumer price index. Also, the index is periodically updated to take account of new consumer products and services, such as VCRs, as well as changing spending patterns, such as more dining out than in earlier periods.
Two other standard indexes are the producer price index and the wholesale price index. These indexes, in general, measure changes in the prices of industrial and agricultural goods before they get to the retail level; they exclude services.
A broader measure of inflation, the gross national product or gross domestic product deflator, captures price increases for all goods and services produced in an economy. The deflator is the most comprehensive measure of inflation because it captures price changes in all the goods and services the economy produces.
Inflation indexes for most countries can be found, with varying lags, in the International Financial Statistics, published monthly by the International Monetary Fund (IMF). The IMF obtains these indexes primarily from reported national indexes.
For nearly 150 years, the United States economy was characterized by alternating periods of inflation and deflation (a generalized decline in prices). Although there was a high level of price volatility (See Figure I), over this long period there was no noticeable upward or downward trend in prices. Recognizing that there are difficulties in accurately capturing price changes over such a long period of time, the United States consumer price index in 1943 stood at approximately the same level as in 1800! The United Kingdom, over this same time, experienced a roughly similar pattern of volatile but trendless prices. The most notable periods of inflation are connected to