9058009865

CHAPTER II

18

86230

Inflatlonary praisurts In the occurrence of expanslve spells. This 'good lenie¹ possibility. was coapletely overlooked by prevalling analyses.

5 • helr_ęon8egi£ence

At the beglnnlng of the Seventles the International situatlon becaae suddenly. quite turbulent. While the regulatory fraaework of Bretton Noods was fading away_t the prlces of aany prlaary goods and raw Materials, iaported by Moęt of Industrlal 1zed countries (and, aaong thea, by the ŚEC countries), began to rlse; a sharp lncrease In oll prlces was the end-resułt of a process started soae years earller, a process whlch was generated by .soclo-politlcal factors whlch were in aotlon In the International arena, and In partlcular, wlthln the North-South relationships.

In this new situatlon the external balance constralnts acted upon the whole błock of industri a 1 ized countries -and, in partlcular, on the EEC countries- in a way rather different froM the past (see section 3 above).

Each Industrlallzed country found Itself in the need of readjustlng, both rapidly and substantlally, to the fact that the saae anount of lnported prlaary connodltles, used as lnputs ln order to produce their output, costed substantial1y aore than before. The required adjustnent was very speclflc: the laport of norę expensive lnputs could not be reduced but noderately, sińce It was necessary for producing finał goods; the problen becaae thus aalnly that of exportlng aore finał goods towards the area of raw aaterial producers and that of decreaslng the laport of finał goods froa other industrialized countries. The approprlate strategy was found, on the one hand, in the reduction of lnternal aggregate deaand (both ln order to reduce the laport of finał goods and in order to create an approprlate space for the export of finał goods) and, on the other hand, ln the pursulng of the aaxiaua of coapetitiveness of national finał goods (both in order to acqulre a larger share of the laports of finał goods aade by the group of countries exporting basie prlaary goods, aalnly OPEC country, and in order to export aore toward the other Industrlałized countries, or to laport less froa thea).

Therefore, the changes occurred ln the International arena produced a situatlon ln whlch ałł the industrlałized countries adopted equal strategles ln the very saae aoaent. The business ęycles, aalnly lnduced now by governaent policies, becaae thus perversely synchronized, whlłe restrlctlve aacroeconoalc policies becaae theaselves 'coapetitive'. In other words, the restrlctlve pollcy adopted by each of the Industrlalized countries was weakened by the fact that the others adopted the saae pollcy in the saae aoaent. But the loss of effectiveness of each restrlctive pollcy could only relnforce the lntenslty of the very saae restrictive pollcy.