Question

HELPP WILL METAL!!

Answer 1

@Amortenson i can help

Answer 2

@loveheart thanks:) Can you tell me how globalization impacted the 1980s?

Answer 3

1 sec

Answer 4

@Amortenson

Answer 5

What were the 1980s all about? There is, of course, no reason that decades should have personalities, any more than we should expect the position of the stars at the time we are born to influence our lives. Nonetheless, characterizing decades—think of the Gay Nineties or the Roaring Twenties, or try to talk about the 1930s without mentioning the Great Depression—has a hold on our imaginations not unlike that of astrology. For anyone who cares about international economic policy, the 1990s were the decade of globalization, when international trade in goods, services, and financial capital became more widespread than ever before. The 1970s were the decade of instability, floating exchange rates, and rising oil prices.

Between them, the 1980s are hard to focus on. During the decade, economic policymaking in industrial countries moved sharply to the right under the political leadership of Masayoshi Ohira and his successors in Japan, Margaret Thatcher in the United Kingdom, Ronald Reagan in the United States, and Helmut Kohl in Germany. "New classical" and supply-side economics provided the theoretical rationale for bold, if sometimes misguided, policy experiments. And for much of the developing world, the 1980s were thought of at the time as the "lost decade," when living standards stagnated or fell year after year.

The 1980s also saw the IMF come of age as a participant in the international financial system. Under the Bretton Woods system of fixed but adjustable exchange rates (1946-73), the IMF played a subsidiary role to the few industrial countries that provided the capital and managed the system. It was the system that mattered, much more than the institution. When that structure collapsed, those same countries devised a strategy for restoring stability under which the IMF would exercise "firm surveillance" over member countries' exchange rate policies, but they left it to the next generation of leaders to figure out what that phrase might mean in practice. Not until the early 1980s did the IMF make the majority of its lending conditional on implementation of detailed macroeconomic policy reform programs. Not until the international debt crisis of 1982 did the IMF assume its modern responsibilities as a financial crisis manager. Those two developments interacted to give the institution a greatly enhanced role.

As a unifying theme for the world economy in the 1980s, consider the idea of a silent revolution in economic policymaking: a subtle but ultimately dramatic drift throughout the decade and throughout much of the world toward policies that were more cooperative, outward oriented, and market friendly than before. It seemed silent because it occurred piecemeal, with no obvious starting or completion point, but it was nonetheless revolutionary in its effects. Without it, the globalization of the 1990s could not have proceeded as it did.

Why a "silent revolution"?

Michel Camdessus, as Managing Director of the IMF, used the phrase "silent revolution" in 1989 to characterize the transformation that was taking place in a number of developing countries. Speaking at the Annual Meetings of the Boards of Governors of the IMF and the World Bank, he noted how countries were taking the "painful decision" to strengthen their economic policies and implement growth-oriented adjustment programs with financial support from the IMF.

What was revolutionary was that many countries that earlier had resisted the IMF's policy advice and changed their policies only as much as was necessary to qualify for financial assistance were now willingly embracing market- and export-oriented policies. Although such policies have been popularized as the "Washington consensus," the neoliberal perspective was neither unique nor original to Washington. Longstanding ideological divisions between those favoring development of private enterprise and those insisting on a primary development role for state enterprise, and between those favoring open and unified market pricing and those insisting on widespread controls, were gradually being resolved in favor of economic liberals in many parts of the world. The collapse of the Soviet Union in 1991 put a very emphatic exclamation point on this victory.

Debating whether this was really a revolution or an evolutionary process is a tempting game to play, but it should not distract us from examining what was actually happening. Economic philosophies and prevailing attitudes toward policymaking changed dramatically during the 1980s. In the new classical economics that became the prevailing philosophy in the 1980s, the government is expected to play an indirect role in guiding the economy and creating the preconditions for sustainable growth but not to assume direct responsibility for ensuring full employment or high economic growth. Few governments would have adopted that view in the 1970s, but many did by the end of the 1980s. In such low-income countries as Ghana, Tanzania, Uganda, and Zimbabwe, the silent revolution ushered in a new age of cooperation with the IMF. In such emerging markets as China, Korea, Mexico, and Poland, it fostered entrepreneurship independent of the state. And throughout the industrial world, short-term stabilization policies gave way to longer-term strategies aimed at containing inflation and deregulating private economic activity.

Ramifications of the revolution

These developments dramatically affected the world economy. Perhaps the most notable achievement was the virtual end of inflation as an international phenomenon. Although the average world inflation rate showed little change, the problem became more and more concentrated in a few developing countries with extremely high rates. For the aggregate of industrial countries, consumer price inflation fell from a peak of more than 12 percent in 1980 to 2½ percent in 1986 and then remained subdued throughout the 1990s (Chart 1). That drop was purchased at the cost of sharp declines in output and employment in the early 1980s, but policymakers generally held fast and eschewed the countercyclical stimulative policies that they had favored in the 1960s and 1970s.

Chart:Industrial and developing countries

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