1979 was a year in which public discussion of the world economy was dominated from the early spring onwards by concern about oil—first its supply and later its price. As yet, however, the actual impact of developments in this sector on the overall growth of world output and trade appears to have been small.

Our forecast a year ago that the total volume of output in OECD countries would increase by 3½ per cent and the total volume of world trade by 5½ per cent was by no means pessimistic by the standards of the time (OECD a few months earlier had put the growth of member countries' output at 3 per cent and of their trade at 5 per cent). But our output forecast appears to have been correct and the trade forecast probably a little low. In the case of output a slight over-prediction for North America, where the oil situation clearly did have a seriously depressing effect on the fortunes of the important car industry, was balanced by under-prediction for Japan and Western Europe.