Political Economy - Political economy Classic Trade liberal...

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Political economy
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Classic liberal theory Trade is a non-zero-sum game “Rising tide lifts all boats” Prosperity depends on free trade Opposes tariffs, subsidies, economic sanctions
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Assumptions of capitalism 1. Individuals and firms are motivated by ___. 2. Everyone’s self-interest is to ___. 3.Competition produces ___. 4. Value is measured by ___. 5. The distribution of goods and services is determined by ___ and ___.
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Political Economy Monetary policy: Regulating the supply of money Fiscal policy: Government taxing, spending, and borrowing.
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Cooperation in Monetary, Trade Policy 1930s, “beggar thy neighbor” period High tariffs, currency wars
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Cooperation in Monetary, Trade Policy General Agreement on Tariffs and Trade 1944. Bretton Woods System Gold standard: $35 for one ounce of gold What is the benefit of backing currency with gold?
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The end of the gold standard 1970, U.S. was pumping lots of $$$ into the system. Why?
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This note was uploaded on 03/02/2012 for the course POLS 2401 taught by Professor Malbrough during the Spring '08 term at Georgia State University, Atlanta.

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Political Economy - Political economy Classic Trade liberal...

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