Chapter II. The World Economy

1991 ◽  
Vol 135 ◽  
pp. 27-49 ◽  
Author(s):  
Ray Barrell ◽  
Andrew Gurney ◽  
Jan Willem In't Veld
Keyword(s):  
World Economy ◽  
Oil Prices ◽  
Oil Price ◽  
Bank Failures ◽  
Capacity Utilisation ◽  
Oil Market ◽  
Rate Of Growth ◽  
The Us ◽  
The World ◽  
The Uk

The start of hostilities in the Gulf in January appears to have removed some of the uncertainties surrounding the oil market, and oil prices have dropped to around 20 dollars per barrel. This development should help sustain growth and reduce inflation over the next two years. Box A sets out some calculations of the effects of the change in our oil price assumptions on our forecast. The appreciation of the D-Mark bloc and the emergence of a recession in the US driven by a wave of bank failures has persuaded us to be less optimistic then we were in our last forecast. Table 1 summarises the outlook. We are forecasting a slowdown in the rate of growth in the major economies in 1991, with some recovery in 1992 and thereafter. The slowdown has already taken place in the US, the UK and Canada, whereas in 1990 Japanese and German growth was at historically high levels. Chart 1 plots levels of capacity utilisation in the major economies. Only in the US has output clearly fallen below capacity, but record levels of utilisation in Japan, Germany and France inevitably imply some slowdown in growth from recent levels.

The World Economy: The impact of rising oil prices and weak equity markets on global growth

2008 ◽  
Vol 205 ◽  
pp. 8-13
Author(s):  
Ray Barrell
Keyword(s):  
Central Bank ◽  
World Economy ◽  
Financial Innovation ◽  
Oil Prices ◽  
Output Growth ◽  
Sequence Of Events ◽  
The Us ◽  
The World ◽  
The Uk ◽  
The Impact

In interesting times several things may happen simultaneously, and they may have connected roots. The financial turmoil that developed initially in the US banking sector had its roots in financial innovation that had made available cheap finance and increased demand for housing. This wave of low cost finance had spread to Europe, and house prices rose in a correlated way. The increase in demand in the world economy that resulted from strong growth in lending and high asset values helped raise output growth outside the OECD, and this in turn put upward pressure on oil prices. Markets sometimes work slowly, and the effects of the increase in demand on prices appear to be coming through just as the asset bubble is collapsing. The sequence of events was not inevitable, as low personal sector saving in the US and the UK as well as elsewhere could have been offset by tighter fiscal policy, and better prudential regulation of lenders would also definitely have helped. The desire to move financial regulation from the central bank, as in the UK, may have been for good, competition based, reasons, but it has meant that financial sector oversight has not taken account of the macroeconomic implications of a wave of lending that rested on risky financial innovation and therefore it has not properly addressed the issue of systemic risk (see Barrell and Davis, 2005). The resulting financial turmoil has meant that banks have made losses, and have been unable to trust each other's solvency when making deals. As a result three month interbank rates have risen well above central bank intervention rates, as can be seen in figure 1.

Chapter II. The World Economy

1986 ◽  
Vol 117 ◽  
pp. 20-29
Keyword(s):  
Interest Rates ◽  
World Economy ◽  
Oil Prices ◽  
Final Demand ◽  
Total Output ◽  
Cold Winter ◽  
The Us ◽  
The World ◽  
Initial Effect ◽  
Small Rise

Fuller data confirm the impression which we formed in May that OECD countries' total output did not change much in the first quarter. It probably increased by about ¼ per cent, with even this small rise attributable wholly to stock movements in the US. Final demand in the US fell and there were declines in total output in a number of countries, including Japan, Germany, Australia, the Netherlands, Switzerland and possibly Italy (for which there are conflicting estimates), white France achieved only marginal growth. The fall was notably severe in Germany, where construction suffered badly in the cold winter. This probably had a wider impact also, and, in North America at least, the initial effect of the slump in oil prices seems to have been depressive, with drilling activity sharply reduced, especially in the US. There may also have been a tendency for expenditure, perhaps on investment in particular, to be deferred in the expectation of falling prices and interest rates.

Chapter II. The World Economy

1983 ◽  
Vol 106 ◽  
pp. 26-38
Keyword(s):  
North America ◽  
Industrial Production ◽  
World Economy ◽  
Western Europe ◽  
West Germany ◽  
The Us ◽  
The World ◽  
The Uk ◽  
A Minor ◽  
Minor Extent

The recovery in the OECD area gathered pace in the second quarter, when its total GDP probably increased by as much as 1 per cent. The rise was, however, heavily concentrated in North America and particularly the US. There may well have been a slight fall in Western Europe, where the level of industrial production hardly changed and increases in gross product in West Germany and, to a minor extent, in France were outweighed by falls in Italy and (according to the expenditure measure) the UK.

The World Economy

1997 ◽  
Vol 159 ◽  
pp. 28-56
Author(s):  
Julian Morgan ◽  
Nigel Pain ◽  
Florence Hubert
Keyword(s):  
World Trade ◽  
World Economy ◽  
Fiscal Consolidation ◽  
The Third ◽  
The North ◽  
External Demand ◽  
The Us ◽  
The World ◽  
World Economic ◽  
The Uk

There are now widespread signs that activity in the world economy has begun to recover steadily from the pause in growth apparent at the beginning of 1996. Output rose by 0.6 per cent in the North American economies in the third quarter of last year and by 0.8 per cent in Europe. Business and consumer sentiment has improved gradually in recent months in most of the major economies. We expect world economic growth to pick up further over the course of this year as the contractionary effects from the downturn in world trade and prolonged inventory adjustment come to an end and as the effects from a more relaxed monetary stance begin to outweigh those from ongoing fiscal consolidation. Recent currency movements should help to stimulate external demand in Germany, France and Japan, but may act to constrain growth within the UK, Italy and the US. For both this year and 1998 we expect growth of around 2½ per cent per annum in the OECD economies.

Chapter II. The World Economy

1989 ◽  
Vol 128 ◽  
pp. 20-39
Author(s):  
R.J. Barrell ◽  
Andrew Gurney
Keyword(s):  
Industrial Production ◽  
World Economy ◽  
Commodity Prices ◽  
Oil Prices ◽  
Short Term ◽  
Developed Country ◽  
Policy Responses ◽  
The Us ◽  
The World ◽  
Early Indicators

Our February forecast suggested that developments in the short term would be dominated by fears of accelerating inflation and policy responses to them. This has indeed been the case. In Japan, Germany and the US wholesale prices have begun to rise relatively rapidly. Although commodity prices, especially of metals and minerals and of developed country foods, have fallen in recent weeks, at least in dollar terms they remain high and oil prices appear to have hit temporary peaks at the beginning of the quarter. These developments are the result of demand pressure. Our equations for real commodity prices, which were reported in the August 1988 issue of the Review, do have rather strong influences from world industrial production in then. As commodity prices are more timely than figures for demand and output they have often been early indicators of rising demand and we believe that they are currently, and correctly, filling this role.

Chapter II. The World Economy

1984 ◽  
Vol 109 ◽  
pp. 21-32
Keyword(s):  
World Economy ◽  
West Germany ◽  
Sustained Growth ◽  
The Us ◽  
The World ◽  
The Uk

The growth of US GNP, which in the first quarter was responsible for the greater part of an increase of the order of 1½ per cent in the output of the whole OECD area, slowed down somewhat in the second quarter but it was still exceptionally fast. With the help mainly of sustained growth in Japan it probably kept total OECD output growing, despite the depressing effects of major strikes in West Germany and the UK. The deceleration in the US mainly reflected a reduction in stockbuilding, which in the first quarter had made the biggest contribution to the growth of demand both there and in West Germany and France.

Disciplining the Hegemon

2021 ◽  
pp. 138-163
Author(s):  
Julian Germann
Keyword(s):  
Foreign Exchange ◽  
World Economy ◽  
Carter Administration ◽  
Organized Labor ◽  
Japanese Investment ◽  
External Pressures ◽  
The Us ◽  
The World ◽  
Anglo American ◽  
The Uk

This chapter argues that in order to protect its export model from the dangers of imported inflation, Germany strove to commit the US to monetary and fiscal rigor. To this end, German officials blocked the attempts of the Carter administration to organize a global Keynesian expansion, and scaled back their foreign exchange interventions in support of a weakening dollar. Both actions helped push the US into the Volcker Shock, which deflated the world economy and launched the attack on organized labor. The chapter concludes that the neoliberal experiment in the US, paralleled and reinforced by similar attempts in the UK, was late and lucky. Rather than the outcome of a decade-long domestic shift—seamless and sealed off from the world outside the Anglo-American heartland—the neoliberal counter-revolution was driven in part by the external pressures imposed by Germany, and subsequently sustained by a bout of Japanese investment.

Chapter II. The World Economy

1990 ◽  
Vol 133 ◽  
pp. 24-49
Author(s):  
R.J. Barrell ◽  
Andrew Gurney ◽  
Stephen Dulake
Keyword(s):  
World Economy ◽  
Oil Prices ◽  
Major Change ◽  
Significant Rise ◽  
Oil Price ◽  
Short Term ◽  
Arithmetic Average ◽  
Crude Oil Prices ◽  
The World ◽  
Short Run

Uncertainties over the prospects for the oil price mean that the short-term forecast is subject to a wider margin of error than usual. The Iraqi invasion of Kuwait could lead to a reduction of world oil production by at least eight per cent immediately and has already produced a significant rise in oil prices. Our central forecast assumes that in the short term oil prices will stay firmer, but that in the longer run there will be no major change in oil market conditions. We have assumed that oil prices (or more precisely the arithmetic average of Brent and Dubai spot prices) will be around $25 per barrel in the second half of 1990, but that they will fall thereafter. This should leave crude oil prices in the range $20–22 per barrel by the end of 1991. Annex I to the chapter investigates the effects of an oil price rise on the world economy, and looks in particular at the distribution of the effects across the major economies. The conclusion of the Annex is that a 25 per cent rise in oil prices is likely to raise inflation in the major seven economies by only a quarter to a half a per cent in the short run, and to lower output by up to a half per cent.

The World Economy

1992 ◽  
Vol 139 ◽  
pp. 27-45
Author(s):  
R. Anderton ◽  
R. Barrell ◽  
G. Caporale
Keyword(s):  
World Economy ◽  
Consumer Confidence ◽  
Recent Information ◽  
The Third ◽  
The Us ◽  
The World ◽  
The Uk

The US, the UK and Canada all experienced recessions in 1991, whilst in Germany and Japan activity began to slow markedly. Most commentators, including the Institute, underestimated the length and severity of the recessions being experienced by the UK and the US. Data for the third and fourth quarters, along with recent information on expectations and on consumer confidence, have caused us to revise down both our estimate of growth experienced in 1991 and our forecast for growth in 1992. The summary details of our forecast are given in table 1.

The World Economy

2007 ◽  
Vol 201 ◽  
pp. 8-14
Keyword(s):  
Interest Rates ◽  
Return On Investment ◽  
World Economy ◽  
Oil Price ◽  
The Us ◽  
The World ◽  
Stable Growth ◽  
The Eu ◽  
Purchasing Power Parities

In 2006, global output, measured in terms of purchasing power parities, expanded by 5.4 per cent, the fastest rate of growth since 1973. Despite a higher oil price and the recent rise in global long-term interest rates, we expect world growth to remain above 5 per cent this year, with a slowdown in the US offset by the rapidly expanding China and stable growth in the EU and Japan. In this issue we explore the widening divergence between the return on investment and real interest rates in the major economies. This suggests that despite the recent rise in long real rates it remains profitable for firms to invest in many countries.

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