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

The Politics of International Monetary Relations

4 Pages
Unlock Document

Political Science
POLI 243
Mark Brawley

The Politics of International Monetary Relations International Media of Exchange 4/3/12 10:59 PM The Functions of Money • Why money helps markets work better • It allows specialization even at the domestic level • Money is a medium of exchange o the in between step in a transaction • Money serves as o a unit of measure o a medium of exchange o a store of value • How is money provided? • Influx of gold and silver from America to Europe brought more trade to Europe because metal was a good everyone wanted • Government action: Legal Tender • Managing Money o Confidence o Liquidity The Central Bank’s Role • Balancing confidence and liquidity • inflation is the result of too much liquidity • Two prices for money o the interest rate § raising interest ratesà lowering liquidity o the exchange rate: the international price of money • Mundell-Fleming noted the tension (aka the “trilemma”) o Fixed exchange rate: creates certainty for international transactions o Open capital controls: to invest and borrow abroad o domestic monetary policy autonomy à gov
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.