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Chapter III. The World Economy

Published online by Cambridge University Press:  26 March 2020

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Abstract

The growth of output in the industrial countries continues to lag behind their oflicial targets and our own expectations (see the appendix). More complete data confirm our February estimate that aggregate production in the OECD area increased by only about 3½ per cent in 1977, leaving unemployment higher at the end of the year than at the beginning in all major countries other than the United States. Even allowing for measures of fiscal stimulation in most of the major countries we do not expect much change in either 1978 or 1979. Growth should be rather faster in Western Europe (particularly this year in the United Kingdom and next year in France, Italy and some of the smaller countries), but we expect these accelerations to be roughly balanced by progressively smaller increases in output in the United States.

Type
Articles
Information
National Institute Economic Review , Volume 84 , May 1978 , pp. 35 - 56
Copyright
Copyright © 1978 National Institute of Economic and Social Research

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References

(1) These figures are calculated, as are other prices and values in this section unless otherwise indicated, in terms of ‘new’ SDRs (that is a weighted average of currency values, see National Institute Economic Review, no. 69, August 1974, page 45). Table 25 of the Statistical Appendix gives SDR/US dollar rates of exchange.

(1) While the OECD forecasts (those published in the pre vious December's Economic Outlook) provide a convenient standard of comparison it should be noted that this is not entirely fair to the Secretariat. Apart from the gap in publication dates, the OECD's forecasts are based on an arbitrary assumption of unchanged policies, as are our own for the home economy, while we try to anticipate policy changes in other countries.

(1) Except for OECD countries no valid comparison can be made with OECD forecasts, which relate to the official esti mates of ‘actuals’. The latter are mutually inconsistent and produce a large statistical discrepancy, which the Institute allocates judgementally among groups.