Surprises in the International Economy

This report is a digest of the proceedings of a conference hosted by The RAND Corporation, December 5-6, 1985, to consider possible international economic developments during the next ten years. Participants tried to identify potentially "surprising" developments — developments the probability or consequences of which are insufficiently recognized today. They discussed major potential "surprises" in the following areas: (1) international financial markets and capital flows; (2) international trade patterns and the international trading regime; (3) macroeconomic conditions and policies; (4) energy and agriculture; (5) population, immigration, and labor; (6) threats to the commercial order; (7) geopolitical developments; and (8) national sovereignty and the significance of national borders. Participants agreed that no forecasting technique would completely prevent "surprises," and that policy must be formulated so as to be robust in the face of changing circumstances. The report describes some of the more striking possible future developments identified during conference discussions.