Lecture 8-10 International Economic Systems

Lecture 8-10 International Economic Systems - International...

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International Economic Systems International Economic Systems - The main difference after the depression was the changes in all international organizations - International Monetary Fund (IMF) - World Bank o Breton Woods Conference - World Trade Organization (WTO) o General agreements on tariffs and trade (G.A.T.T) Breton Woods System (1944) - Wanted to change the system of exchange rates - They wanted someone who could control this system Problems that needed to be avoided; associated with the Depression 1. Collapse in aggregate demand – wanted to avoid repetition - Followed the Keynesian model - It was looked at as desirable to have a deficit - It was better to have that then to have another recession - Adopting capital controls was a way to prevent this from happening (restriction on ability of people to move money from country to country) 2. Collapse of International Trade - One countries exports were another’s imports and countries started putting restrictions on how much could be traded - There was a need to have an agreement to regulate trade 3. Collapse of the monetary system - In the 1920’s they tried starting to use the Gold Standard - In the 1930s a bunch of systems were put in place but none lasted very long
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International Economic Systems - Purposed a system of flexible exchange rates - Everything was being converted into US dollars - Other countries were able to change their rate against the US dollars but it was not supposed to
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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 8-10 International Economic Systems - International...

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