{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Week10 - Week 10:Reading Study Guide Jeffrey Frieden Global...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 10:Reading Study Guide Jeffrey Frieden, Global Capitalism , 339-412 When and how did the Bretton Woods system end? (pp. 339-342)? (Aug 5 th , 1971) The ´golden window´ closed (the gold standard finished.) The monetary system of the golden dollar would require the U.S. to sacrifice its domestic stance in order to maintain the international economy. For this to occur, Nixon would have to cause a recession by reducing wages and raising interest rates. Also at that time, imports were greater than exports and since dollars were losing value, American goods were expensive compared to other abroad. Due to all the factors mentioned above, Nixon decided to abolish the golden dollar system, and place an import tax in order to aid the U.S. economy during the coming adjustment period. What were the trends that undermined the system? (pp. 342-346) Deficit spending during the 1960´s lowered dollar value (lack of capital, lead to bill overprinting which causes inflation), so interest rates were raised: causing recession. Inflation remained high because of military spending (Vietnam War) and large social spending projects (ex: ¨anti poverty war¨) These actions artificially strengthened the purchasing power, but the dollar´s value remained low, so foreigners began to cash in large sums of dollars in exchange for gold. This became a problematic trend, that if left to continue would resolve in a lack of gold reserves. What were the forces challenging international trade and investment in the 1960s and 1970s? (pp. 346-351) Protectionism favored local firms that competed with multinationals. In Europe, skepticism of U.S. corporations lead to an increase in gov. limitations for foreign companies. Other challenges included: skeptics of F.D.I. (foreign direct investment) among many nations, unionized workers demanding better wages, and the breakdown of the Bretton Woods system. People´s reaction to the situation in Chile with Allende, along with ¨the American Challenge¨ served as negative sentiments towards large multinational corporations. What was Import-Substitution Industrialization (ISI), and what kind of nations pursued it? Mostly pre-industrialized nations similar to Brazil, Mexico, India, favored ISI. This system was an economical one comprising of an industry maximizing mentality. ISI intended to develop the economy through industrial development with minimal imports while reducing the nation´s dependency on global trade. The main problem was the need for basic materials required in industrial production that needed to be imported. Yet without an export counterbalance, money would be lost. What were the desirable and undesirable effects of ISI? How did the East Asian model differ from ISI? (pp. 351-356) DESIRABLE: Fast growth of industry and output Industrial investment was subsidized by the government
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
Heavy tax breaks for industry ¨rationalization of protection¨ reduction of some trade barrier to encourage exporting.
Image of page 2
Image of page 3
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