We describe a scenario for inflation in the framework of non-critical string theory, which does not employ an inflaton field. There is an exponential expansion of the volume of the Universe, induced by enormous entropy production in the early stages of cosmological evolution. This is associated with the loss of information carried by global string modes that cross the particle horizon. It is the same loss of information that induces irreversible time flow when target time is identified with the world-sheet Liouville mode. The resulting scenario for inflation is described by a string analogue of the Fokker-Planck equation that incorporates diffusion and dissipative effects. Cosmological density perturbations are naturally small.