National Monetary Policy in an Open World Economy

Almost every country and the European Economic Community, too, wants to have stable prices in its territory and to attain appropriate economic growth and thus full employment. Many economies — industrial and developing countries alike — have succeeded in reducing their inflation rates distinctly in recent years. After the second oil price explosion at the end of the 1970s had been overcome, the rates of economic growth — also of both industrial and developing countries — settled down at around 3 per cent a year. Now, however, the expansionary forces appear to be flagging. At all events, recent economic growth has not been strong enough to solve the main problem currently facing national economies, that is, unemployment. Unemployment rates have remained high. In a number of countries — notably the United States and, to some extent, the Federal Republic of Germany — economic growth rates have exceeded the average. In those nations the unemployment rates have declined. In other countries where economic growth has been below the average, such as France and the United Kingdom, they have risen further.