ABSTRACT
The circumstances that emerged in the world economy in the early 1970’s broke up the consensus on domestic economic policy that had emerged after World War II and acquired legitimacy with the historically unique growth rates of the 1950’s and 1960’s. There are two reasonably unambiguous definitions of the inherently ambiguous concept of economic leadership. Definition One relates to innovation and leading sectors; that is, the relative primacy of a country in commercializing a new technology and establishing, for a time, a dominant position in a major sector. Definition Two relates to policy; that is, the assumption of responsibility for the successful operation of the world economy as a whole by a single country. The relative role of the United States in the world economy has declined with the revival of Western and Eastern Europe. The tragic experiences of the world economy from 1920 to 1939 radically altered both the international and domestic aspects of the pre-1914 consensus.
