OPEC - an international food and agriculture program...

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OPEC Organization of the Petroleum Exporting Countries is a cartel of twelve countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. 1960, OPEC was founded to unify and coordinate members' petroleum policies. Original OPEC members include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. The principal goal is the determination of the best means for safeguarding the cartel's interests, individually and collectively. It also pursues ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations OPEC has large influence on the market for determining oil prices and production. The Oil Embargo 1973—demonstrated the level of power. This raised oil prices around the world, OPEC countries during this time joined the New International Economic Order —they called for stable and just commodity prices,
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Unformatted text preview: an international food and agriculture program, technology transfer from North to South, and the democratization of the economic system. Unholy Trinity Hypothesis in international economics—developed in the 1960s by Mundell, that it is impossible to have all three of the following at the same time * A fixed exchange rate * Free capital movement * An independent monetary policy. The point is that you can't have it all: A country must pick two out of three. It can fix its exchange rate without emasculating its central bank, but only by maintaining controls on capital flows (like China today); it can leave capital movement free but retain monetary autonomy, but only by letting the exchange rate fluctuate (like Britain--or Canada); or it can choose to leave capital free and stabilize the currency, but only by abandoning any ability to adjust interest rates to fight inflation or recession (like Argentina today, or for that matter most of Europe)....
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This note was uploaded on 06/06/2010 for the course POL S 186 taught by Professor Cohen during the Winter '10 term at UCSB.

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