Structural Changes in the World Economy-Implications for Development Policy and International Co-operation

Structural Changes in the World Economy Implications for Development Policy and International Co-operation K N Raj The world economy had by the beginning of the 1980s reached a state of near stagnation, with total output volume rising no more than 1.9per cent in 1980 and 0.9per cent in 1981 and total export volume actually declining by 1 per cent in 1981. Though there has been no general breakdown of the kind experienced between 1929 and 1931, sharp changes in prices and interest rates have brought several countries close to the point of default on their rapidly growing debts, massive short-term capital movements have further destabilised exchange rates, and the possibility of a major financial collapse with global repercussions cannot be ruled out Clearly these are symptoms of a deeper malaise, not amenable to traditional policy prescriptions.