In October 1981, there was an international meeting in Moscow, where inflation was a major talking point. Stephen Hawking presented a paper claiming that inflation could not be made to work at all, but the Russian cosmologist Andrei Linde presented an improved version, called "new inflation", which got around the difficulties with Guth's model. Ironically, Linde was the official translator for Hawking's talk, and had the embarrassing task of offering the audience the counter-argument to his own work! But after the formal presentations Hawking was persuaded that Linde was right, and inflation might be made to work after all. Within a few months, the new inflationary scenario was also published by Andreas Albrecht and Paul Steinhardt, of the University of Pennsylvania, and by the end of 1982 inflation was well established. Linde has been involved in most of the significant developments with the theory since then. The next step forward came with the realization that there need not be anything special about the Planck- sized region of spacetime that expanded to become our Universe. If that was part of some larger region of spacetime in which all kinds of scalar fields were at work, then only the regions in which those fields produced inflation could lead to the emergence of a large universe like our own. Linde called this "chaotic inflation", because the scalar fields can have any value at different places in the early super-universe; it is the standard version of inflation today, and can be regarded as an example of the kind of reasoning associated with the anthropic principle (but note that this use of the term "chaos" is like the everyday meaning implying a complicated mess, and has nothing to do with the mathematical subject known as "chaos theory").
The idea of chaotic inflation led to what is (so far) the ultimate development of the inflationary scenario. The great unanswered question in standard Big Bang cosmology is what came "before" the singularity. It is often said that the question is meaningless, since time itself began at the singularity. But chaotic inflation suggests that our Universe grew out of a quantum fluctuation in some pre-existing region of spacetime, and that exactly equivalent processes can create regions of inflation within our own Universe. In effect, new universes bud off from our Universe, and our Universe may itself have budded off from another universe, in a process which had no beginning and will have no end. A variation on this theme suggests that the "budding" process takes place through black holes, and that every time a black hole collapses into a singularity it "bounces" out into another set of spacetime dimensions, creating a new inflationary universe -- this is called the baby universe scenario.