depends on sustainable non-inflationary growth which is underpinned by adequate and reasonably smooth international financial flows. 39. Thus the world economy has evolved in such ways as to increase both the breadth and the depth of international economic interdependence, while at the same time the required political mechanisms for the joint pursuit of previously agreed global economic objectives have become even more complex. And to this emerging system have been added the major shocks of the 1970s and early 1980s - two major oil price shocks, global price inflation, important changes in the structure of relative prices and costs, and two severe recessions. The 1970s also saw rising rates of unemployment in the industrialized countries, and slower overall global growth. Those shocks and trends created strains not only in the world economy, but also in the system of multilateral economic co-operation. 40. The oil price shocks called attention to systemic risks in the existing arrangements for the channelling of oil from a relatively few supplying countries to a large number of consuming countries. They also contributed to a major shift in international lending patterns with private banks assuming a much larger role in the provision of international credit than they previously had done. Stagflation in the industrialized market economies confounded their economic policy-makers and contributed to the breakdown of the previous international (Keynesian) consensus over the nature and appropriateness of macro-economic policies. Many Governments in industrialized countries applied themselves primarily to the control of inflation, while others accorded priority to combating unemployment. The recessions were everywhere to some extent met with automatic fiscal stabilization, as tax revenues fell and expenditures increased; but the efficacy of independent monetary policy was now limited, or complicated, by highly interest-responsive international capital flows centred on newly expanded Eurocurrency markets. Anti-inflationary policies in major industrialized countries brought government 
**Analysis**
The text appears to be discussing the global economy and its challenges, specifically the impact of oil price shocks, inflation, and recessions on international economic cooperation and policy-making. It highlights the complexities of international financial flows, the role of private banks in international lending, and the challenges faced by governments in controlling inflation and unemployment.

**Category**
International trade, Economic development