Chapter II. the World Economy
Abstract
Chapter II. the World Economy SAGE Publications, Inc.1989DOI: 10.1177/002795018912700103 R.J. Barrell Andrew Gurney The overall outlook Developments since our last three months have been dominated by fears of accelerating inflation and the policy responses to th~rrt. Domestic price developments remained moderate, but both oil prices and the prices of a number of industrial materials, especially metals, have risen in the last few months. prices have risen their November low of $12 per barrel to around $16 per barrel in recent weeks, and metals prices, as rr~e~® sured by an index constructed by th~ Institute, rose by 25 per cent between September and December, although prices have been a little easier in recent weeks. Both price developments are good leading indicators of rising demand. A rising oil market gives the OPEC cartel more of a chance to produce a semblance of unity, and metals stocks have been at low levels recently, and hence increases in demand have been feeding rapidly to prices over the last 1 ~ rrro~nth~.42~ Interest rates have risen sharply in the last two months as the monetary authorities, in the US, but also in Germany, France and the UK have responded to the emerging signs