Eric Blair's forecast from the 1940's called for a 1984 international political economy with constant war between three global powers, designed to use up resources otherwise so abundant that the masses would be free to reflect on, and consequently depose, the bureaucratic elite (George Orwell, 1949). Orwell's forecast was wrong, although perhaps in part only because it was a self-negating prophecy: one that induces corrective measures. Undoubtedly the most successful long-term economic forecast was Joseph's prediction to the Pharaoh of the fourteen-year agrarian business cycle. Others with less privileged information have fared less well. A founder of our own profession, Malthus, erroneously predicted long-term stagnation at the subsistence level, because he underestimated technical change (although for Sub-Saharan Africa and parts of South Asia, the Malthusian projection appears closer to the mark). This essay reviews long-term forecasts from the last several decades in the area of international economics, to see whether patterns can be distinguished in their success or failure.

Now available directly from: IIE11 Dupont Circle, NWWashington, DC 20036Tel: (202) 328-9000This book traces the origins of international debt and recent trends that burden it, including the effect of oil price shocks, high interest rates, and world recession. It examines the extent of the financial system's vulnerability, and the adequacy of bank regulation and of central bank coverage for emergency lending to international banks.Recent international rescue measures mounted for the major developing countries are discussed, and the prospects for orderly servicing of the debt during the next three years are reviewed under alternative assumptions about world economic conditions to determine whether the problem is one of short-term illiquidity or longer-term insolvency. The book also notes the implications of reduced bank lending for growth in developing countries and, by induced effects on trade, in industrial countries. It considers mainstream policy measures, especially increasing the resources of the International Monetary Fund and World Bank, as well as more radical proposals, such as mandatory stretch-outs and write-downs of bank loans.