Payments Problems from Oil Prices
Nounting Deficits for Petroleum-Lmporting Nations
A year ago, the world's money managers were close to a state of panic at the enormous imbalance in the international monetary system. The oil-producing countries had decreed huge increases in the price of petroleum, from an average of about $2.40 a barrel to more than $10. There seemed no way that oil consumers—the poor countries in particular—could afford to pay for their energy supplies, and no way that oil producers could spend their expected surpluses. On every hand, there were predictions of chaos and impending collapse of existing world monetary arrangements.1
Somehow, the international community limped through 1974, and the sense of panic seems to be subsiding. Optimistic statements about the resiliency of the world monetary ...