ABSTRACT
The second oil crisis in 1979 caused renewed inflation, declining econornic growth, and an increase in balance-of-payments deficits in industrializedcountries, which were still suffering from stagflation. The sluggish economies of those countries resulted in a weakening demand for petroleum in 1981 and 1982, and this placed OPEC's current account balance in the red in 1982. The world economy simultaneously experienced a recession that was spread over the largest area ever. Then world econornic recovery began when the crude oil price stabilized at a lower level.
