146. The baseline projecLion is both a bencbnark and an extrapolation of currentconditlons and of expectations for tbe near-tern and nedium-term from section rrr.current conditions, in tshis resp€ct., include both current and prospeciive econornicPolicles and a return to normal conditlons for other factors that affect. theeconony. There ia not always general agreerflent as to the course of expected futurepollcy init.iatlvesr indeed, there ls often considerable variation in opinion. Theba'eline reflects one view and, in discussing the baseline, najor differences arenoted- The lor.rer-gropth scenario discugsed in paragraphs r5o to 163 berow mayreflect ssne of the uncertainties lnvolved. l. Policy assunpt ions I47. The core policy assumptions concern fiscal policy. noneCary policy aniiexcbange policy. The fiscal policy assunptions are relatlvety easy to explain.Extrapolation of present thinking suggescs that fiscal policy in najor developedcountriea uirl generalry renain rather cautlous through r99o anat becone onlynarginally nore expansLonary thereafeer. l,tonetary policy, on the other hand, isnore compl' icated. currently' higher interest rates are expected in the unitedStates, as higb as l0 per cent for 3-nonth ?reasury bills by 19g7, fouowed bygradual declines. partly as a response co rates in the Unieed .stateB, projectionsfor sone other countrieg are sinilar true 1es6 pronounced. Ilor{ever, since thesemedium-term changes refr.ecc fluctuations i.n rear activity in the presence ofrelatively stahle rnonetary expansion, interest raees nay be expectgd to declinenore or les€ continuously thereafter, but onry very alowly. Extrspolation of thesepolicies is unrlkely to yield nominal rates much trouer tban z per cent even by cheyear 2000. rrroreover, since lnflation rates of oEiD countries are projected co bestable in the 4 to 5 per cent range, h19h real interest reteB may be expected topersist nearly to the end of lhe century.
**Analysis**
This text appears to be discussing economic policies and projections, specifically focusing on fiscal and monetary policies, interest rates, and inflation rates. It does not seem to be related to any of the other categories, such as natural resources, agriculture, health, education, or humanitarian aid, as it does not mention specific industries, sectors, or issues related to those areas.

**Category**
Economic development, International trade