POLSCI 2J03 Lecture Notes - Lecture 11: International Monetary Systems, Bretton Woods System, Floating Exchange Rate
19 Mar 2020
School
Department
Course
Professor
Document Summary
Globalized, liberalized financial systems generate spectacular wealth but create extreme inequality and crisis. One system, two parts: international monetary system (ims) Other ways of organizing currency such as fixed rate. Fixed rate: when a country commits to exchanging its currency at a fixed rate: global credit system. Controls who can borrow money and on what terms. Trend-- public to private, growth and crisis. Explosion in the availability of credit, and an increase of crisis. Conference to decide how to organize the new world system. Because of the debts undertaken by the uk, leadership shifted to the us. Creation of imf, world bank, dollar exchange standard (des) Imf: facilitates international trade, promotes employment and sustainable economic growth, and helps to reduce global poverty-- short term funding. World bank: provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects-- long term funding. Nixon shock (1971)-- economic measures taken in response to soaring inflation.
