World Development Report 1984

LI".
ii.: tie ccli- 'armarkur:-i li- l.cr ;.rc,cln *i- -l
r r r rI he cuntTacling .p,raI ot
*rign r,i, Jtlt Tll.. wjtt,r China - :rr- %%orlid t3de, 1a2t)p
l.-r pcrlcc i1c I r. tc din *-r r,-lld 1
r L ibrir hc i~.ar-, 'mn---uragrd t*-\ u-. iIr .rr, cr TI!'.r. r;inr
1
*i..rn.il r-p33 rn-jit; Th; cnari.) It L' -. d 1. OmrI
. I
ncurrEd tic lr-hr dJ etcION l cn l-I'.6i ci n'iIi.. -
Sr- r.irhc r n,lll rFhc creditcir .:-LUniri, -- | i
,mainl% rh: Ulr..,,.l IK,n d-. n nd th, i.ti. 41
,,1,_'li
l'nr'rr- vtrace i- *:. rr.lcad M3te cirrin-: -:
n r -rrc 1,.n Clit te:irm and rn.ri -
.lr-t' :.c 1A [- ..r.d ridparalr.; it ar-
II,r * t-..n r-citrd.eJ ir rr-..Ih,
-.ir .1 F-r-elt r-l;c ct-c rielFr.rir -r
uiuIe.i hbl. h
t-d-rault ia,
.. .W. t . . .. : ~~~~~~~~prIl i
\ L.-,-J ...
t.:al --r cs dflanir, . ncr . ii . c1.1 i
--
- u'ir Icrr r ; 3 - rlJ . i, ic, -- pr. r;- r r
credririr. In L- atil,nme -r,d p.-lIar dr-br
-r:lti nhi-rl. But *c cOntriht UL1 tI-. cd ih -i o
Iapr .,r it.. rntr.rurca-ric al 1:ariril nirckor
Tim, i -. rid rJ n an3gr rr- r r ...Mn '''1 r.
i-'32 tt Ii-: Tb ..... t: . r--i -pu-c, .-c:ccnrccr ........ hi 1
p:r.ded cleit C-IP' b. 34 -.-rr.nr but
crj-, p.rnsi.-n r., cn-n:, d t ILi t ha.e .r, I c- l-.- . .r- .
ccibrar-rd .-ni- *- r. pertr- 'cca nx . ,n-fl- ..
hri. ,ri -.r rh Th r r.34-n I.-r ir nr.nini, c-.r rd. j t 4u. ntarrt r.-rirccr:.-n- an-i rhi, dto ith-F,ni h d ,-". p.,-d ,-un-
m,ntr-.ac n. - t ric c-lar-'r- -i - he i hir-. rat -.hi lnge i-nrc In l-crha , .,,--.nN lr 4-plied . t - .: rn r gnrudc- - i-r-,*mit-n,r v n. c cnl. nre'h
,nrernic' -il rr dincr -_ 'c ar- n, ri- "~rh ,r.,r j di-. t cirnniianrui , c\.rl t, .................
-id tJLI cr-l tt-b.ir. c-- - Jrr mLIrrc. r- ritmn- bahr hip-
ThiciOih rarlrr m pr . rr- - -m m ar cni i.F r -pc p.iln i.-..h.r.IN.-'t..un- i char d el.
prctit,.r. Ill. i--i3. Nj,cr h., rhere Kr m
lr htch rh ari rF,-I- cad b--n in lI, rIit. rrc. p r Iciulari, I r , i I i n An-neri, i r., -nellar breakdi r; cI -. ii 'hc c I n
rr- mi-ndcecrrcr--Iir..r- *rx and rbr-- i-ni .i -p-lrd thr . c1 t -i -Ic . c thr rhi I - rcro-n irri,cl,r-d .ater tih
i--.;rc-r- r, -tradrbd heci -icc: i1hr: li- rn, In ! che e di-|h... ri-r. I r ai In ddacrirn niernacrinrn al *r-:ptra-
Tht 1t Ia%- lin- -arru-.n-tr r art crirnurru d t.. -Lint ri..- cion h l.-th thr,.ti4 rh-: h 3r..tc.r- i r X d.
rF c L'ciu .cacr- i . Hi le III r. :. * -a., :
lr. r,r .itt h- bru- ,imcitrc: in.iItLiiil ,rd m-am-n- :n.t.rrinr-t-. h-,
.pr-irr,c--nnr- \crrru-rrit ricrcr er . t-.r.trn rhe iUi3c.. L nd I-1c)s-rr,-ie;rn p-rmcri,d c,iucc cttettr. dr..n InI-r-re
r,.i-cd cr,tct N-.-.. i ci i d- rtiii in i-rnld crt rL1- nit,- .-. inc prol. can-c ct Ill, -pie,L --t ;r.nn c- chi- c-. rz
nrcF t.- i-.rc -.,eic.td f.IrLc' . crt r k c-- -cI Jrn -.. c.. 1a-.- . cap rc, prc-L'b.rrir- It r-- ttc. i
the range of 9 to 10 percent (see Table 2.6). House- Disinflation was successful in its immediate
hold savings rates held up well in the 1970s, while objective (see Figure 2.2). Among major industrial
corporate and government savings rates were countries, the reduction in consumer price inflastrongly
pro-cyclical. In recessions profit shares tion was particularly sharp in the United Kingdom
fall and governments run larger deficits. Thus a (from 18 percent in 1980 to 5.4 percent in 1983), the
principal reason for the decline in gross and net United States (from 13.5 percent in 1980 to 4.2 persavings
rates was simply slow and unstable cent in 1983), and Japan (from 8 percent in 1980 to
growth. It is as yet unclear whether there has also 0.7 percent in 1983). With few exceptions, howbeen
a fundamental underlying trend toward ever, even in the trough of the cycle, rates of inflalower
rates of gross savings. But the high real rates tion remained above the average for the 1960s. At
of interest in the early 1980s do suggest that the the same time, there were serious adverse effects
credit market has become very tight and, in the for world trade and the world trading system and
event of increased demand for private investment, equally-if not still more-serious effects for the
is likely to get still tighter. international financial system.
21