ECON 201 Lecture Notes - Lecture 11: Bretton Woods System, Lyndon B. Johnson, International Monetary Fund
Document Summary
International monetary fund led the negotiations for the debt ridden countries of the south. Washington consensus and neoliberalism - free trade, privatization, end of government subsidies, deregulation, reduced role of government in the economy and slim down the welfare state. When you are doing this then this is osterities, can"t burden the government with supporting the lower class. The united states gold reserves began to diminish. If you devalue your currency then your goods are going to be cheaper abroad to buy and their goods will be more expensive for your population to buy. Austerity makes it difficult for those at home because they will have less money to spend on money abroad which would solve your balance of payments problem. United states asked for other countries to revalue their currencies, in 1971 us put a lot of pressure on other countries to revalue their countries. Print some more dollars -- but this causes inflations.
