Breton Woods Monetary System, Oil Embargo, And International Political Economy Introduction IPE refers to the Global Political Economy or the study of political science as it relates to the economy and international relations. Cohen, B.J. (2008, p. 16) defines IPE as “the reciprocal and dynamic interaction in international relations of the pursuit of wealth and power.” It considers various cultures and their response as a country or organization to certain political initiatives that have an impact on international trade, socio-economic changes and developments, including but not necessarily limited to the market developments…
Download full paperFile format: .doc, available for editing
Extract of sample "Breton Woods Monetary System, Oil Embargo and International Political Economy"
Download file to see previous pages
Furthermore, scholars utilize a mixture of empirical data and theories to arrive at an understanding of IPE at different points in time. This essay looks into the major events that had an impact on the International Political Economy or simply International Relations, namely, the Breton Woods Monetary System and the Oil Embargo of 1973. Discussion What was the Bretton Wood Monetary System (BWMS)? The process of monitoring the exchange rates between the dollar and other foreign currencies by World Bank (WB) and the International Monetary Fund (IMF) and lending reserve money supply for developing nations, wherein the US dollars were linked to gold with $ 1 equals 35 oz. of gold, was well known as the BWMS. In nearly 150 pages the National Bureau of Economic Research (NBER) publicized the history of Bretton Woods, from its origin to its demise, and concluded by saying (1992, p. 61) “The defects and dramatic collapse of Bretton Woods have discouraged nations from seeking to restore a system like it.” The system collapsed as soon as the dollar link to gold was severed and instead, the value of foreign currencies was made to float against the US dollar. It derived its name from the American resort where a conference of national economic leaders agreed on a plan to reconstruct out of the war damages, by following the international monetary rules. 730 delegates from 44 nations then allied with the USA and UK had agreed to link the foreign exchange (FX) rates to the dollar which corresponded to a gold standard value. The international transactions were then aimed to reconstruct countries damaged by World Wars. They decided to fix the FX rates against the dollar. The currency of each country was given a par value against the dollar. They agreed on not allowing the foreign currencies to float and to maintain adequate supply of monetary reserves and to avoid any economic warfare. FX currency should not be controlled to regulate purchases or sales of currencies intended for trade of goods and services. As for the purpose of having a forum wherein members can vote on certain decisions pertaining to the monetary rules, the USA maintained a veto power. By August 15, 1971, seeing that dollars were headed towards a proportion which could not be backed by gold, the standard of convertibility of the dollar to gold was suspended. Both the par value and gold standard ended. That was the end of the Breton Woods Monetary System. Currencies of industrial countries were made to float for consideration during FX transactions. In place of gold standard value of the dollar, the basis became whatever promises were made by the government. The events after Britton Woods saw USA and UK suffering in terms of deficits in its Balance of Payments and high unemployment rates. This has made economists suggest that the economic system should once again be created or modified similar to the way it was done when the Bretton Woods Monetary System began. But there have been major changes in the world market, particularly the rising prices of oil which caused great damages
...Download file to see next pagesRead More
Tanzania is a socially diverse country with nearly125 ethnic groups (Buchert, 1994). Tanzania is as a result of a union between mainland (Tanganyika) and the islands of Zanzibar, Pemba and a number of other smaller islands which was formed in 1964 (Tripp, 1997).
According to the essay, the recent financial crisis happened due to the ignorance of challenges raised by previous international monetary systems. Effective approach to solution of the problem of crisis recurrence would be the centralized reserve mechanism. The implementations of this mechanism with IMF and the greater use of SDRs is recommended.
This shows that the Australian consumers and the American consumers have an equal PPP with their respective currencies. The exchange rate between Australia and America will be stable (Tanzi and Gupta 141).
PPP exchange rate of U.S and Canada is 1. The
This essay focuses on the main agreements, that were reached at the conference at Bretton Woods, with main sole aim of reviewing the performance of the gold standard after the occurrence of a great depression in the US. Main rules and policies for financial and commercial relations between industrial states were established at the Bretton Woods.
The supply of these resources is supposed to be controlled by the economic factors. However, other than the economic factors non-economic and political factors have also played their part in bringing unsteadiness in the oil prices. There are different developments that have affected the political economy of oil.
The transition from authoritarianism to a liberal, democratic and free market system of governance can have a variety of important ramifications in the social, political and economic spheres. Bureaucratic
The international monetary system can be said to be “the institutional framework within which international payments are made, the movement of capital is accommodated and exchange rates among countries’ currencies are determined” (International finance in practice).
The degree of influence of the rise of oil and gas prices in the international economy is dependent on the contribution of the oil and gas for the growth rate of GDP of the economies. The share of cost as a percentage of the
The relationship between politics and economics are interrelated in that they affect each other by either controlling the policies or practices. This is essay will dwell on the three main challenges facing the International Political Economy the roots, causes and possible remedies that could solve these issues .
The Loganville Window Treatments (LWT) president has also decided to reduce inventory cost by dealing with direct orders instead of producing large batches for storage. Another decision focuses on marketing the products and obtaining customer’s orders and feedback through the use internet (Case study, N.d).
1 Pages(250 words)Case Study
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Breton Woods Monetary System, Oil Embargo and International Political Economy"
with a personal 20% discount.