11.1 - IR concentration 430 -6 32 warren hall 11/01/07...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
IR concentration 430 -6 32 warren hall 11/01/07 Politics and the International Monetary System 4 Periods of International Trade 1. The Classical Gold Standard System (1870-1910) -London-world’s international financing center -Golden Age of International Financing -myth -no such thing as an automatic, apolitical Gold Standard system -states are very alert to the exchange of gold -interest rate policy to discourage outflow of gold -countries devalued their gold, rather then ship more gold out -system managed by central banks led by Great Britain -smoothly run, but not automatic -crashes with WWI 2. Interwar Chaos Prewar Crises: -suspended the link between currency and gold -in favor of unlinked paper notes -politicization of currency -prior to WWI monetary policy was left to the cfntral bankers -WWI gets governments more involved in regulation of currency -wartime inflation -print more money to pay for the war -also tax citizens, borrow money -huge increase in currency causes long lasting effects -people start to worry about returning to the gold standard -scarcity of gold compared to newly printed money -different levels of inflation in different countries -destroys the established exchange rates -total reassessment required after WWI Post-WWI: -decline of relative British financial power
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/05/2008 for the course GOVT 1817 taught by Professor Katzenstein, p during the Fall '05 term at Cornell University (Engineering School).

Page1 / 3

11.1 - IR concentration 430 -6 32 warren hall 11/01/07...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online