Pax Britannica and international investments

Pax Britannica and international investments - Pax...

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Investments During the mercantilist era no investment taking place In the 19 th century the money started going out The form of the investment it is important as well : portfolio investment Money being lend by loans or bonds : this is different when we talk about post WW2 period The form today is direct investment : they go abroad and build factories and business A positive Environment for International Investments The Gold Standard : facilitated the investments : very secure There were no rules like before the gold standard : not taking out gold / money outside of the country Britain’s economic lead ( capital abundance) : Britain was in unique situation compared to other states. Britain was the first state to be industrial , factor endowments that gave it competitive edge . the main source of main was Britain, it is not a surprise . Free trade and international investment : In the middle of the 19 th century – complementary interests British money is lend to other governments and city governments (state governments in the USA). The British are building a railroad so you want to jump in, so you need to raise the money to do that. You send a representation to London so you borrow directly or you sell a Bond on the London market – you raise capital. You buy engine, steal, rail cars. The place you find these goods it is in Britain. IT is a nice fit between these things. However the problem is that it was not maintained
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Pax Britannica and international investments - Pax...

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