March31 - POLI 243 *note the similar things driving...

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

View Full Document Right Arrow Icon
March 31, 2009 POLI 243 Japan and International Monetary Cooperation The Plaza and Louvre Accords *note the similar things driving decisions by Japan and Germany Conflict between the U.S. and Japan - Historically the Yen had been undervalued o After the war, the U.S. took similar attitudes towards the countries it occupied (Germany, Japan) They made the decisions about where to value currencies in Bretton-Woods, and they wanted to give Europe an advantage so it could recover and help them against the USSR Thus, they purposely encouraged countries in Europe to go into Bretton-Woods with undervalued currencies to help them recover postwar (made them competitive in exports like EOI does) - Both West Germany and Japan had large increase in export o However, the difference was in the goods: Japan’s goods were known for being cheap, labor-intensive, manufactured goods (not known for high quality or high complexity) - U.S. monetary policy shifted in the late 1970s and early 1980s to combat inflation o Bretton-woods falls apart, so there is a move to floating exchange rate (market pressures should push U.S. dollar down and Yen up – this happens somewhat, but not entirely) o Why don’t the values get totally reconciled? Japanese gov’t liked values where they were (if the currency was
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 04/28/2011 for the course POLI 243 taught by Professor Markbrawley during the Spring '09 term at McGill.

Page1 / 3

March31 - POLI 243 *note the similar things driving...

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