The pickup in the U.S. inflation rate to its highest rates in forty years has led to renewed attentionbeing given to the Great Inflation of the 1970s. This paper asks with regard to the GreatInflation: “How did it happen?” The answer offered is the fact that, in both the United Kingdomand the United States, monetary policy and other policy instruments were guided by a faultydoctrine—a nonmonetary view of inflation that perceived the concerted restraint of aggregatedemand as both ineffective and unnecessary for inflation control. In the paper’s analysis, thedifference in the economic policy doctrine in the 1970s from that prevailing in more recentdecades is represented algebraically, with this representation backed up by documentation ofpolicymakers’ views. A key conclusion implied by the analysis is that the fact that anonmonetary perspective on inflation is no longer prevalent in policy circles provides groundsfor believing that monetary policy in the modern era is well positioned to prevent the recurrenceof entrenched high inflation rates of the kind seen in the 1970s.