INTERNATIONAL ECONOMIC GROWTH PAPER - Essay Example

Free trade was also established and its target was to prevent currency competition. For the next 30 years, it managed to be successful for the attainment of common goals but collapsed in 1971. United Kingdom's economy is currently the fourth largest in the world. Over the first half of the twentieth century, it had a peace making and policing role in the world economy. The world wars had brought about a contraction in the world international trade and investment and UK held a prominent position.

But over the years, as globalization occurred, the prominence of UK saw a decline as the foothold of US in the world economy grew stronger after the world wars. In the years of 1920 and 1930s, UK maintained a fluctuating exchange rate regime but it created economic instability and created friction between countries. So at the end of the first half of the twentieth century, a fixed exchange rate system was followed to resolve balance of trade problems. However, in the agreement between US and UK in 1942, UK played a key role assisting US attain the aims of free trade and payments.

In 1950, however, other European countries became stronger than the UK economy through economic integration. The Breton Woods agreement was also made on the outline plan proposed by the UK and US. In 1945, the world economy faced a challenge when a shortage for the American currency occurred. The US gave loan to the UK in exchange for the lifting of exchange rate controls from sterling. However, this did not turn out well as others started to save UK's currency and cashed it in US dollars.8. Critically examine the view that the years 1948-73 represented a 'golden age' for the international economy.

In 1948, Ludwig Erhard, a German politician, eliminated price fixing and controls on productions that had been enacted by the military rulers and advocated trade liberalization which recovered Germany from the after effects of the Second World War. The International Trade Charter was also agreed in the UN Conference but was not approved in the US. In 1951, the European Coal and Steel Community attempted to establish free trade for certain materials in European countries. In 1960, European Free Trade Association was formed and it also aimed at the liberalization of trade between member countries.

In 1973, OPEC, an oil cartel restricted the supply of oil to the world market and raised the crude oil price. As a result of this restriction, exporters in Saudi Arab became rich overnight. The years of 1948-73 were certainly the Golden Age for international economy as the years were characterized by increased trading, due to reduced barriers and abandonment of protectionist policies. This bettered the relationships between countries, increased the emphasis on specialization, raised productivity and thus, brought about economic growth in many countries9.

Why did the Asian 'Tigers' achieve such