{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

lec_12_110B - Economics 110B World Economic History II...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 110B World Economic History II Spring 2008 University of California, Davis Lecture 11: The Bretton Woods System
Image of page 1

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

View Full Document Right Arrow Icon
Today’s Program What is Bretton Woods? World Bank (IBRD), International Monetary Fund, ITO now WTO The Intellectual Origins of the Bretton Woods Institutions The International Economic Environment Post World War II The US and UK shape the Bretton Woods institutions Weaknesses: The United States at the center of Bretton Woods Balance of Payments, Capital Controls and Capital Flows The Demise of Bretton Woods and the ‘gold standard’
Image of page 2
Readings Cameron and Neal Ch.14, pp, 362-371 If you want a reading I suggest chapter 4 of Barry Eichengreen’s Globalizaing Capital. This lecture will follow that chapter closely.
Image of page 3

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

View Full Document Right Arrow Icon
Why do we care about Bretton Woods? A conscious coordinated attempt to regain the international stability of the 19 th century and achieve prosperity. Today we have a world with China and the US which is called Bretton Woods II Many activists cite the IMF and World Bank as the reason countries stay poor. To understand that international economic agreements may be likely to last when other geo-political commitments are supportive.
Image of page 4
Economics you need to know Balance of payments identities How deficits (fiscal and private) lead to current account deficits Balance of payments deficit = loss of reserves or a capital inflow (i.e. a rise in debt) A surplus is a gain in reserves or a capital outflow (country adds to its international assets) Why trade deficit countries need loans. What the exchange rate is The issues of the Trilemma
Image of page 5

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

View Full Document Right Arrow Icon
Interwar period: Review There was a lost faith in the market Destabilizing and speculative capital flows were blamed for instability Exchange rate depreciations had been competitive and beggar-thy-neighbor Cooperation was lacking in the international system Debtors had to ‘bear the burden’ of adjustment
Image of page 6
Planning for the Post-War Britain and the US had already been planning as of 1941 Post-War Agreement hammered out by 1943 ratified in Bretton Woods, New Hampshire at the Mount Washington Resort 1944. BW comes into full operation in the late 1950s.
Image of page 7

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

View Full Document Right Arrow Icon
The Goals of US-UK Compromise for International Stabilization Fund Balance of international integration and national policy independence Provide more cooperation Ease adjustment of the balance of payments deficits (to avoid deflationary policies) Avoid destabilizing capital flows International watchdog to sanction countries that destabilized the system with depreciations
Image of page 8
How the System differed from the
Image of page 9

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

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern