ABSTRACT
The quadrupling of the price of oil between late 1973 and early 1974 had major effects on the world economy in three distinct areas. First, there were the macro-economic effects on world employment and inflation in the oil-importing countries. Second, there were the problems posed by the financing of the unprecedented current account deficits, and the implications of alternative forms of financing for world reserves, the world money supply and exchange rates. Third, there were the effects on the distribution of real world income amongst the world economies. In this chapter we deal only with the effects on the current accounts and the associated financing problems. 1
