ECONOMICS lies at the heart of politics," writes Washington Correspondent Lawrence Malkin, "and like your heart, you never notice it until it starts acting up."

In the U.S. these days, it would be hard to find anybody--politician, economist or ordinary citizen--who is unaware of the economic palpitations afflicting the nation. Indeed, as this week's cover story discusses in detail, the difficulties the U.S. is experiencing are shared by developed nations around the world. That became clear to Correspondent Malkin on a recent visit to Europe to renew friendships made during a seven-year stint covering the economic scene abroad. At one point, a British official told him that unless inflation was curbed, "the whole fabric of society as we know it could come apart." Apocalyptic, perhaps, but the climate of concern led the editors to undertake a thorough study of inflation as a worldwide threat to affluent nations.

As the story took shape, Associate Editor George Church, who had been assigned the writing task, visited Washington to join Malkin in interviews with Government leaders. He then sifted through mountains of detail to help explain the causes of inflation and examine the question of whether full employment and stable prices can exist side by side. Meanwhile, Kathleen Cooil and Isabelle Kayaloff conducted their own interviews and spent hours in the library stacks uncovering, among other things, the fascinating tidbit that the Babylonian Code of Hammurabi (circa 2000 B.C.) contained the world's first known system of price control.

As in the past, the project was greatly assisted by TIME'S Board of Economists, who lent their vast expertise at an all-day session with Church and his colleagues in the Business section. As a matter of fact, notes Senior Editor Marshall Loeb, "one year ago our board was saying that inflation would be a more persistent problem than anyone thought at that time. Now, much to our regret as citizens, their prediction has come true."

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