Lecture 4 - International Financial Systems

Lecture 4 - International Financial Systems - International...

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International Financial Systems - It’s said that the crash in 1989 was possibly worse than the crash in 1928 - There was large debt internationally with the United States - In the 1920’s consumption of goods was ahead of income - International banks was making credit easier for consumers to have - Land prices in certain regions grew drastically (stock market and real estate) - “The US Federal Reserve” allowed the banks to create too much money, and then when the banks started to get out of control, the government tighten too much on the bank and the economy burst - In mid 1928 - there was a fall in US foreign lending and a repatriation of French capital - It wasn’t only debt and reparations that were creating this problem for the US Debt in the 1920’s 1. Debt obligation to the US 2. Problem of primary producers – overproduction in agriculture and in manufacturing - The primary producing countries wanted to increase their exports, but because the products were inelastic, there was more of a decrease in price
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This note was uploaded on 04/18/2008 for the course ECONOMICS ECN 220 taught by Professor Jolly during the Winter '08 term at Ryerson.

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Lecture 4 - International Financial Systems - International...

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