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THE WORLD ECONOMY AT THE END OF THE MILLENNIUM bY DEEPAK LAL Working Papers Number 786 Department of Economics University of California, Los Angeles Bunche 2263 Los Angeles, CA 90095-1477 September 1998 Paper for the Rosecrance Festschrift J.Mueller(ed): Prosperity, Politics and Peace: Essays in honour of Richard Rosecrance, Westview Press, New York (in press) THE WORLD ECONOMY AT THE END OF THE MILLENNIUM Deepak La1 James S. Coleman Professor of International Development Studies, University of California, Los Angeles ABSTRACT The paper examines the rise fall and rise of the Liberal International Economic Order over the last 150 years, and critically examines the various hopes and fears in developed and developing countries that this most recent global integration is raising. JEL classification: F02, A13, N70, P16. FINAL REVISE Address: Dept. of Economics, September 1998 UCLA, 405 Hilgard Ave., Los Angeles, CA 90024 Tel.: 310-825 4521 Fax.: 310-825 9528 e-mail: dlal@ 3 THE WORLD ECONOMY AT THE END OF THE MILLENNIUM by Deepak La1 INTRODUCTION If a Rip van Winkle had gone to sleep at the end of about 1870 and woken up in the last few years, he would find that little has changed in the world economy. He would note the various technological advances in transportation and communications (airlines, telephones