Poli sci notes 11-7 - Adam Caplan Intl Politics The Unholy Trinity o Governments can only achieve 2 of the following three 1 A fixed exchange rate

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Adam Caplan Intl Politics 11/7/07 The Unholy Trinity o Governments can only achieve 2 of the following three: 1.) A fixed exchange rate 2.) Monetary policy autonomy 3.) Capital mobility What is the International Monetary Fund (IMF)? o Lender of Last Resort o Features: Short-term Reaction to specific financial crises Huge loans The IMF Under the Gold Standard o Countries have fixed exchange rates and have to hold reserves o When a country gets low on reserves: Get an IMF loan Revalue currency The IMF Today o Does not have as clear of a mandate Under Bretton Woods just give a country a loan and revalue But what if a country floats? What if a country fixes their exchange rate to a floating currency? o Solution: IMF pays attention to the economy in general and not just the reserves and exchange rate Decision Making: IMF Voting o IMF always run by a European (World Bank is run by an American) o System of weighted voting o Countries get allotted votes relative to the size of their contribution
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This note was uploaded on 04/10/2008 for the course POLI SCI 103B taught by Professor Jensen during the Fall '07 term at Washington University in St. Louis.

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Poli sci notes 11-7 - Adam Caplan Intl Politics The Unholy Trinity o Governments can only achieve 2 of the following three 1 A fixed exchange rate

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