oussama94
05-28-2017, 19:39
Across the world, inflation was at very low levels. In contrast to
the stagflation of the 1970s—where inflation was high and real economic
growth was low—the global economy in 1985 had done a complete 180-
degree turn, as inflation was now low but growth was strong.
While low inflation, even when coupled with robust economic growth,
still allowed for low interest rates—a circumstance developing countries
particularly enjoyed—there was an imminent danger of protectionist policies
like tariffs entering the economy. The United States was experiencing
a large and growing current account deficit, while Japan and Germany were
facing large and growing surpluses. An imbalance so fundamental in nature
could create serious economic disequilibrium, which in turn would result
in a distortion of the foreign exchange markets and thus the international
economy
the stagflation of the 1970s—where inflation was high and real economic
growth was low—the global economy in 1985 had done a complete 180-
degree turn, as inflation was now low but growth was strong.
While low inflation, even when coupled with robust economic growth,
still allowed for low interest rates—a circumstance developing countries
particularly enjoyed—there was an imminent danger of protectionist policies
like tariffs entering the economy. The United States was experiencing
a large and growing current account deficit, while Japan and Germany were
facing large and growing surpluses. An imbalance so fundamental in nature
could create serious economic disequilibrium, which in turn would result
in a distortion of the foreign exchange markets and thus the international
economy