POL208Y1 Chapter Notes -Free Trade, Currency War
13 Feb 2013
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Lastly, simmons poses yet another interpretation to understanding the dynamics of the international political economy. Simmons takes an approach that considers domestic policy makers" objections and constraints when deciding on trade policies. Her research in the area leads her to analyze three domestic factors that influence each actor"s perception of who is most likely to defect from the rules of the international economic game. She suggests that political ideologies set a trend in countries" objectives to cooperate or defect. Evidence shows that although left polities encourage trade liberalization, they are more likely to devalue their currency if it means bettering the conditions for their labour force. On the other hand, right-wing polities may practice protectionist measures but nevertheless they aim to maintain currency stability. She claims that weak governments with short time horizons are more likely to allow their currency to devalue because they are less concerned with long-term effects of their policy implications.
