POLI 260 Chapter Notes - Chapter 5: Special Drawing Rights, Bretton Woods System, Renminbi
Document Summary
Theories of trade: international trade amounts to about a sixth of the total economic activity in the world. Mercantilists believe that the outcome of economic negotiations matters for military power: economic liberalism belief in the possibility of cooperation to realize common gains. By building international organizations, institutions, and norms, states can mutually bene t from economic exchanges. It matters whether the state"s wealth is increasing in absolute terms: marxism is a third theoretical/ideological approach to ipe. Liberal economists are interests in maximizing the overall (joint) bene ts from exchange, rather than how total bene ts are distributed among the parties: interdependence two or more states are simultaneously dependent on each other. States that trade become mutually dependent on each other"s political cooperation in order to realize economic gains through trade. Liberals argue that interdependence inherently promotes peace: mercantilists prefer making trade serve a state"s political interests favourable balance of trade.
