DEVS 230 Lecture Notes - Lecture 2: Floating Exchange Rate, Foreign Exchange Market, Marshall Plan
4 Dec 2017
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Objectives of week 2: understand how the bretton woods regime operated and why, to grasp the bretton woods through an ipe lens, 3 concerns of ipe, conceptual tools from the readings, eg. power(taylor & rioux, strange) and regime(peet) Technical terms: exchange rates- important for buying power, managed through 2 ways, fluctuating exchange rates affect national and international economies, fixed(or pegged) exchange rate- a rate the central bank (government) sets and maintains the official exchange rate. Country"s exports are relatively less expensive for foreigners. Foreign products become relatively more expensive for domestic consumers, discouraging imports: devaluation may help reduce a country"s trade deficit( export more than it exports) Government actions and policies that restrict or restrain international trade. Inflation: protectionism, 1929 great financial crash, unemployment, poverty, 1933 great depression, case study vienna 1923. Goals: guide global trade and monetary relations to serve particular power interests, avoid economic warfare" of 1930s(protectionism, etc. see power point.
