"Soft Landing" of the Economy in the Western Industrialized Countries

The self-sustaining upswing of the world economy continued into the spring of 1989. Its backbone has been private investment. The investment climate has improved due to favourable sales expectations (especially in the export sector) and an increase in capacity utilization and therefore revenues, and also because entrepreneurs in Europe have engaged in strategic investment to prepare for the completion of the internal market in the EC. With the economy in danger of overheating, monetary policy was pursued a restrictive course to prevent an acceleration of inflation. The forecasts until 1990 presume a "soft landing" of the economy, i. e., a slight slowdown in economic growth in the OECD countries from 3.3 percent in 1988 to 2.5 percent in 1990.