POLI 283 Lecture Notes - Lecture 9: Floating Exchange Rate, Neoliberalism, Invisible Hand
17 May 2016
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Document Summary
Countervailing tariffs is the event where country a levies tariffs against imports from country b, in response to country b levying taxes against country a"s imports. During the great depression and stock market crash, countervailing tariffs collapsed export industries as competitors were increasingly shut out of the international market. Voluntary export restrictions (vers) are governments pressuring other countries to voluntarily limit their exports. Dumping mass units of a good at insanely low prices to destroy other competitors. All aforementioned barriers are protectionist - aiming to defend domestic markets by isolating the country from trade. This almost never works since no nations possess all the resources they need to be self-sufficient. Reported as a balance of trade for each country (where imports take away from balance of payment) Fixed exchange rates are when two countries establish a set exchange rate for their currencies which is not responsive to supply and demand.
