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From our point of view the interesting observation is that such a threat exists; and the interesting question is what may be done to alleviate the situation and to reduce the likelihood that similar world economic recessions will occur in the future. But first is it possible to explain the world's economic performance since 1973? 4. EXPLAINING WORLD ECONOMIC PERFORMANCE: CONTENDING THEORIES As might be anticipated, there is no consensus amongst economists about the causes of the apparently poor performance of the world economy since 1973.

GENERAL POLICY OPTIONS AND THE FRAMEWORK FOR POLICY IMPLEMENTATION A prior question when discussing policy is whether it is necessary to adopt a particular policy at all. The answer depends on whether objectives are likely to be achieved if things are left as they are, and if not, whether it is possible to come closer to realizing them via a positive approach to economic policy. The basic objective in the case of the global economy is growth and development with stability. However, this simple statement conceals the very many aspects of global economic performance discussed above which entail avoiding mass unemployment, rapid inflation, recession, payments disequilibria, debt crises, international financial crises, and an unacceptable degree of inequity between countries.

Indeed to some extent the success of the NICs should have expansionary as well as contractionary repercussions, as their economic growth encourages growth in the demand for the goods in which they do not specialize. Put simply, the actual impact of the NICs on the world economy can easily be exaggerated; it is difficult to see how the emergence of NICs could have had such a dramatic impact on such a wide range of economic variables in such a wide range of countries over such a relatively short space of time.

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