Class Notes (836,147)
Canada (509,656)
POLI 243 (112)
Mark Brawley (109)

poli 243 lec 18th feb.rtf

2 Pages
Unlock Document

Political Science
POLI 243
Mark Brawley

midterm : theories, evidence, explanation 18th feb a national govt. issuing currency, to attract/promote it as an intl. medium of exchange Key currencies : Advantages competitive edge in financial services : better financial position bargaining leverage over other states : if foreigners in need of intl. money can only get it from your citizens, then the govt. can exercise sovereignty and control who can handle these transactions, who can enter border etc. Having everyone else use your money gives govt. power over outside actors ability to run trade deficits : others would take your money. E.g. US, difference made by paying its own money out. The country gets an advantage of dealing with deficit problems impetus for outward foreign investment : individuals have advantage of going out, establishing their firms outside the country. FDI wherein a firm buys an existing business Disadvantages : currency "overhang" : to get everyone interested in using your currency is challenging , you're trying to push enough money to help international economy. You can't force others to use it, people have to believe that its gonna be worth something in the future. A need to develop confidence among actors in intl economy. Too much paper money/credit in the system that you have reserve asset (overhang). One of the reasons why Bretton Woods system breaks down. US demonstrating : if there is no backing to US dollar, people have confidence because they think they'd spend it in US. That would cause an inflationary surge. trade deficit can get too big constraint on domestic options : how do you manage this currency (domestic vs intl concerns). 2008 financial meltdown, in order to stimulate econ. recovery, make interests low so people can borrow easily. Pus
More Less

Related notes for POLI 243

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.