Discusses economic achievement, economic constraints, and economic policy issues relevant to Western Europe. Constraints include decreases in resources and energy, a slow-down in the baby boom, and public resistance to pollution-causing technology. Achievements include high standards of living, positive trade balances, and international…

Theories and models dealing with the vicious cycle between exchange rates and domestic inflation and the way in which this relationship has influenced the economic policies of European nations are reviewed. Attempts of European nations to avoid the cycle of depreciation and inflation are covered. New theories may be necessary. (IS)