The purpose of this paper is to investigate the notion that liberal democracies are more prone to inflation than other types of regime. In this section we establish the context of this research by briefly rehearsing some of the main themes in the literature on the political economy of inflation. Sections II and III deal with the analytical methods employed in this paper and the results of these analyses respectively. In our Conclusion we re-examine the debate on the relationship between liberal democracy and inflation in the light of our findings.

Gibraltar provides an instrumental lesson in the study of international affairs. In some areas, and on some subjects, reasoned rational compromises and solutions to disputes and differences between peoples and sovereign states are rendered impossible because of the emotional arguments which are introduced and which lead to entrenched, immutable negotiating positions. No issue is more likely to generate these situations than disputes over areas of land and differences over sovereignty. History supports this conclusion; territorial disputes concerning rights to entitlement have proved the most common cause of disagreement leading, first, to acrimonious relationships, then to the breakdown of communication and, finally, to overt physical hostilities and war.

There have been three dominant approaches specific to the study of the foreign policy of the Federal Republic. Perhaps the most influential has concentrated on relating the dynamics of West German foreign policy to changing inter and intra bloc relationships. This approach has started from the premise that both German states are simultaneously embedded in their respective bloc systems and occupy a crucial strategic position at the point where these blocs directly impinge on each other. It has therefore cast its explanation in terms of inter and intra bloc relationships.

It is comparatively rare for academics to get together to discuss problems connected with teaching. A lively discussion however developed out of an ad hoc meeting at the 1978 BISA conference on the teaching of courses which could be loosely subsumed under the title of ‘International Organization’ (IO). The discussion made clear that this area of International Relations teaching is in a state of flux, and that considerable uncertainty exists both about what to teach and how to teach it. Many ideas and suggestions emerged at the meeting and the exchange of views was clearly useful.

Recent years have seen governmental concern with international economic issues attain an intensity previously reserved for the great questions of war and peace. Students of international affairs have followed suit with a revival of academic interest in the complex relationship between the economic and the political in the international arena: hence the resurgence of international political economy.

International economic issues are now ‘high politics’. Alarm at the domestic implications of ‘stagflation’ within the advanced industrial countries (AICs) has prompted calls for reflationary stimulants to trade and economic activity. Domestic economic dislocation has, however, also revived protectionist arguments within certain Western economies.