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Chapter II. The World Economy

Published online by Cambridge University Press:  26 March 2020

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Extract

High real interest rates and high rates of unemployment were the main characteristics of the world economy in 1981, with relatively low growth rates as the link between them. Rates of inflation moderated.

Since the huge increases in oil prices during 1979 gave a fresh and powerful upward twist to the inflationary spiral, the chief priority of governments in most OECD countries has been to get this turning down again. To this end they have followed strict monetary policies and fiscal policies which despite big budgetary deficits in some countries would be restrictive on a full-employment basis.

Type
Articles
Information
National Institute Economic Review , Volume 99 , February 1982 , pp. 29 - 50
Copyright
Copyright © 1982 National Institute of Economic and Social Research

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References

(1) Economic Outlook, 30, December 1981, pp. 23 and 39.

(2) Op. cit., pp. 11 and 22.

(1) Unless otherwise indicated, prices and values in this section and the following sections of the General Trends division of the chapter are quoted in US dollars. The average value of the dollar in terms of SDRs was about 10 per cent higher in 1981 than in 1980. We expect it to rise by another 2½ per cent in 1982 (page 40).

(1) Bergson, op. cit.