Whereas a litany of different rationales can be given for why nations and groups of nations interact with one another, it can convincingly be stated that economic interaction and the means through which wealth is earned, spent, and leveraged throughout the world is the most effective means of understanding the way in which politics takes place…
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Firstly, chapter 7 denotes the fact that international political economics and the agreements that are associated with it deal with political and economic agreements. As the name implies, development, debt, trade, and resource requisition and distribution are a core complement of the way in which international political economics is currently defined and practice. However, more than just monetary and financial decisions, power politics, namely forcing one state or entity to engage in international political economics to a different degree or extent that they might otherwise be willing, is a fundamental complement of the way in which international political economics is currently defined. Another salient factor that helps to constrain and define the way in which international political economics takes place within the current world is currency rate. Ultimately, even though economic decisions can be made with regard to X product being purchased at any price, the role and extent to which exchange rates impact the decisions that international political economics incurs are extraordinary. The impact that the dollar has on setting supply and demand ratios and equilibrium point is profound. However, even though this power is profound, the demand for the dollar is not something that is set in stone. Although the United States government necessarily has a great deal of latitude in respect of the amount of dollars that are in global circulation and “supply,” the demand for these dollars fluctuates based upon fear or confidence, restricting or expanding the global economy as a function of this faith or fear in the international currency of exchange. An approach that the chapter references with regard to the way in which international political economy is currently defined concerns global economic factors. What is meant by this is that even though the preceding analysis has been wholly concentric upon the way in which state actors can influence the global political economy, the fact of the matter is that non-state actors, indeed individuals, can have a profound impact on the evolution and development of international political economics itself. For instance, currency speculation is one manner through which an individual, or a group of individuals, can have a deep impact on the currency exchange rate and/or an overall level of trust or belief in a given currency. History is replete with examples of individual investors, and groups of investors, that had been able to successfully shake competence or boost confidence in a given currency, and thereby fundamentally alter the way in which international political economics takes place. Although these situations are somewhat less important than the governmental/state decisions that have thus far been discussed and analyzed in terms of supply and demand of a given currency, they are nonetheless definitive and important in determining the future of the international political economic system. Whereas chapter 7 is effective in helping to give an overview of the internatio
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These new economic ties and technologies, in turn, have led to a decline in the territorial nature of everyday life. Globalization first emerged with the end of the Second World War, especially after the dire economic policies of the 1930s led to a sharp decline in international trade.
This trade has helped to develop the current world and globalize the way in which interactions take place. As a way of discussing this interaction to a greater degree of depth, the following analysis will serve as a discussion of the key points and relevant levels of understanding that are presented within the text of Chapter 7.
International monetary finance structure is explained in detail in chapter 7. The chapter begins by comprehensively throwing light upon the exchange rate. The math of exchange rate has been very well explained at the beginning of the chapter. The foreign exchange market diagram explains how the demand of goods produced in the United States changes the value of the Mexican Peso and based on that how the value of the United States Dollar changes.
It is through the flow of the international currencies to economies that affect the rules under which institutions are formed and governed, while also determining the success of businesses (IMFS 126). The structure of the international monetary and finance affects the political relationships between countries globally, thus explaining why the powerful countries are able to exert their authority and power over the less developed and less influential countries in the world.
The author states that commercial borrowing increased sharply and was one of the main reasons behind the huge debt accumulation. The private sector was partly or mostly responsible for the debt crisis because of their extensive borrowing of short-term loans with higher interest rates from foreign countries and banks.
The topic of "International Debt Crisis" has raised risen a lot of discussions in recent decades.; Tthe cause of the crisis was complex; andit rooted in the 1970s and 1980s which when the Organization of Petroleum Exporting Countries (OPEC) quadrupled the price of oil.
General fund profited intra-European trade through assisting shareholders accumulate great sums of finances at the expense of money exchanges. The time the Euro was launched in 2002, its worth was nearly one for one versus the U.S dollar. Since that time, the Euro has slowly grown in worth versus other monies.
It takes into considerations the political and economic issues affecting the welfare of the international states through employing multidisciplinary and interdisciplinary approaches (Hobson 27). The IPE attempts to solve the related problems of international relations including political, economy and international trade issues.
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