The accelerated inflation and large payments imbalances that have plagued the world economy in recent years have created new challenges for economic policy. Institutions such as the Internatrional Monetary Fund have found themesleves operating in a global environment markedly different from that for which they were originally designed, and developing countries have found their aspirations threatened by large increases in their payments deficits. There have been wide disagreements about the most suitable policy responses by developing countries to these problems and about the appropriateness of ther stabilization programs favored by the Fund. During the 1970s the growth in international commercial bank lending to some developing countries served a purpose in recycling the surpluses of the members of the Organization of Petroleum Exporting Countries (OPEC)-but at the cost of a growing external debt, and there are signs that debt problems may intensify during the next few years.