Long term outlook for the world economy : issues and projections for the 1990s

The authors argue that, at the broad level of global analysis, there are good reasons to be optimistic about the 1990s. First, there are favorable supply side developments in many of the high income countries. Second, considerable scope exists for a recovery of private consumption and investment in the debt stricken developing countries, as well as in Eastern Europe and the USSR. The 1990s will see a continuation of the process of economic integration currently under way, emcompassing mainly the industrialized and the newly industrializing economies, propelled by rapid technological progress and increased competition in international markets, and taking place against a backdrop of policy reforms, economic restructuring, and political liberalization that has been gathering momentum since the early 1980s. According to the authors, the expected pattern of international trade and investment flows in the 1990s is likely to perpetuate two tracks of growth in the developing world. While it may be expected to be high in many Asian industrializing economies, relatively high population growth and low private investment will probably continue to depress living standards in many countries in Latin America and Sub-Saharan Africa. The differences in investment rates of the 1980s between the higher-income and other developing countries will, if not reversed, tend to widen the productivity and technology gap between them.