ABSTRACT
This chapter sketches out an outline of major factors contributing to the transformation of the international economic scenery. It discusses the institutional framework for international financial transactions, that is, the transition from fixed to flexible exchange rate systems. The chapter deals with the impact of increasing scarcities in food and energy. Fixed exchange rates seem to promote money market integration thus weakening national monetary and credit policies. The petro-surpluses are, in fact, additions to world savings in the form of foreign financial assets. It is therefore only natural to compare the petro-surpluses with savings aggregates in major countries. The supply of the new financial assets was thus matched by increased demand from oil-exporting countries (OPEC) to hold them. OPEC new savings were thus the result of the increased financial liabilities of oil importing countries following the rise in the oil bill. The extreme volatility of the financial markets inevitably makes authorities, institutions, investors and individuals.
