POLI 244 Lecture Notes - Lecture 18: International Trade Organization, Hegemony, General Agreement On Tariffs And Trade
13 Jul 2014
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A higher exchange rate will make it less desirable to buy goods from another country i. e. canadian dollar being equal to us goods means american goods are cheaper for canadians now they go to us to go shopping. Canadian goods are now more expensive to us. Bretton woods post wwii rules of the game: the exchange rate regime, instability. Great depresion: competitive devaluation, fixed rates then managed. When fixed rates, a lot of responsibility on the us (esp during. Vietnam) because they needed a sound fiscal policy. Nixon went off gold standard changed to fluid exchange rates: supply and demand would govern the policies to manage the system. If one currency became overvalued they would trim it down. If it was undervalued, they would buy it to regulate it: international monetary fund imf. Originally to manage situations where countries ran out of foreign exchange buy stuff they used that.
