Blackwell Reference Online

Extract

The rise in the price of oil put some OPEC countries, particularly Saudi Arabia, among the richest countries in the world and had a marked effect on the global economy . The golden age since the Second World War, which had seen almost uninterrupted growth and full employment, ended with recessions in 1973–5 and 1981–3. In even the strongest European economies GNP fell: in West Germany by 0.5 per cent in 1974, 1.6 per cent in 1975, 1 per cent in 1982; in Italy by 3.7 per cent in 1976, for the first time since the war. Unemployment in Western Europe, which had averaged 1.6 per cent in the 1960s, was 4.2 per cent in the 1970s, 9.2 per cent in the 1980s and 11 per cent in 1993. This weakened the position of trade unions . Japan, too, experienced its first negative growth rate since the war in 1974–5, though it was only −0.2 per cent: its balance of payments moved from a surplus of $4.6 billion to a deficit of $10 billion in 1973. Western Europe and Japan coped well by reducing their oil consumption and there was no breakdown of the global economy as in the 1930s: economic growth continued but at a slower pace. World trade grew annually at an average of 8.5 per cent between 1963–73 but at only 3.5 per cent in the following decade. The share of advanced capitalist countries fell as that of the newly industrializing economies (NIEs) increased, but the developed countries were nevertheless ... log in or subscribe to read full text