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Lecture 5

GGR221 Lecture 5.pdf

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Romila Verma

GGR221 Lecture 5 ▯ 1940's to 1980's Keyneian economics was a dominant approach, especially in Europe.After the 80's government involvement changed to more of a neo-liberal (Hayek) approach One of the last components of Keyens contribution was the Bretton Woods unit where four countries met right after the WWII. 44 Countries around the world were constantly devaluing their currency to induce -raUN Monetary and Financial Conference - in 1944 - Rules fo new international monetary systeem - Used to be backed up with gold but the gold standard was abandoned so currencies were just floating - New rules said: - fixed exchange rate - you can change your currency price only after negotiations - US currency would be the only currency backed up with gold - Creating of International Monetary Fund (1944) - All participating countries would contribute to the fund and would be able to borrow based on how much their contributions - International Bank for reconstruction and development (IBRD) now part of World Bank ▯ Crisis of Fordism (1970's on) - Regime of accumulation collapsed: - declining productivity rates due to deskilling jobs that lead to apathy and people did not care - divergence productivity and wages. people were making more money but the company was getting less cars - international competition = Japan - internationalization of roduction - Spatial fix = industrialist stared adopting this strategy to increase profits and they started to move off-shore to cheaper labor spaces - Structural overcapacity --> at a certain point, poeple had enough cars, toasters and so on and replace value was quite low so factories started closing down - poor quality control --> huge recalls and massive defects and people stop wanting to buy american products - lack of market contact and collapse of mass consumption ▯ Why did it collapse? - fiscal crisis of the state - growing unemployment because firms are moving off-shore - reduction of profits due to unemployment - Stagflation - raising unemployment + raising inflation because of a significant increase in oil prices - Collapse of Bretton Woods 1971 - resulted in fluctuated exchange rate and is based on confidence levels and backed up by treasury ▯ Conclusion - every era characterized by a distinct regime of accumulation and mode of regulation - Fordism - based on a regime of accumulation-mass production and mass consumption - mode of regulation: Keynesian Welfare State - ensured stability and growth until 1970;s - reemergence of crisis and need for new consensus ▯ -ndustrial Restructuring, Post-Fordism and the CanadianAutomobile Industry Th- hthe most important industry in Ontariostry - Automobile creates more jobs than any other
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