Prospects for the world economy now appear bleaker than they have for more than five years, with the growth of output and trade having begun to slow in all regions. GDP growth in the OECD area is expected to slow particularly strongly this year. During the emerging markets crises of 1997 and 1998 the downturn in the world economy was driven by events outside the major industrialised economies, and a combination of the automatic stabilisers of the market mechanism and the prompt action of the monetary authorities ensured that the phase of strong growth was not interrupted. The current conjuncture is different, in that the origins of the slowdown appear to be within the OECD region, and they are difficult to offset with policy and hard for market-based stabilisers to absorb. The slowdown in production, trade and investment in information technology related industries is at the core of the problems facing policy makers, and their tools are not well adapted for dealing with cycles driven by specific industries.