Class 4 Flashcards
Through what insitutitions it was created a new international liberal ecnomic order?
The creation of an international liberal economic order: The IMF, the WTO and the World Bank.
What was the goal of creating this new liberal international economic order?
There was a intention to create a neo liberal system to avoid economic crashes, in the same way of UN there would be institutions to avoid economic crisis. American wanted to create economic insitutions, and that the markets would stay open.
What are the 3 components of international free market:
Lack of protectionist measures - Free trade - ITO –> GATT(1947) –> WTO(1995);
Stable convertability of currencies - IMF;
A Capital market -IBRD / WB;
What was the most favoured system?
Most favoured nation system: Meant everyone had the same conditions and there could not be discrimination. A contract provision in which a seller agrees to give the buyer the best terms it makes available to any other buyer
3 central guiding principles: Non-discrimination; states will agree to treat all contracting parties the same as their most favoured trading partner; a state may agree to reduce tariffs on the goods it imports from its trading partner.
What was bretton woods?
Bretton Woods Conference: Gathering of countries from all around the world to regulate the international monetary and financial order after the conclusion of WWII, 1944.
What were the results of Bretton Woods?
Established the IMF and the International Bank for Reconstruction/Dev (IBRD)
IBRD goal was to speed up recovery in Europe post-WWII and to foster economic development through lending to build infrastructure
The beginning of a push to create international economic cooperation, building towards international economic order. Open markets, big deal. End of economic nationalism and start of international economic order.
Goal was for industrial democratic nations to lower barriers to trade and the movement of capital to promote global economic ease.
US and UK were most powerful at conf and were most active in negotiations.
What were the 3 components of The embedded liberalism establsihed after secodn world war?
The post 2nd War estabilished a system of embedded liberalism, based on 3 components, adherence to (Keynesian) economic liberalism, multilateralism and the rule of law.
What was the goal of IMF?
The IMF was mandated to assist states in international monetary cooperation, to promote exchange rate stability, and to provide memebers with short term arrangements (loans) if they were beset by balance of payments problems. Primary purpose was to promote stability of exchange rates and financial flows.
Working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment/sustainable economic growth, and reduce poverty around the world
Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money. Fund is $666 bn.
Originally meant to prevent global financial crises, then started being implemented to help countries that had trouble balancing their payments. Funds were loaned on contingencies of meaningful policy change.
Key organization of the international liberal economic system—allowed system to balance the rebuilding of international capitalism with the maximization of economic sovereignty and human welfare, known as embedded liberalism.
What was the goal of World Bank?
World Bank: international bank loaning out credit for reconstruction post-WWII. Founded in 1945.
States goal is the reduction of poverty, defined as commitments to the promotion of foreign investment and international trade and to the facilitation of capital investment. Original intention was for temporary loans to low-income countries that could not afford loans commercially.
Shifted its goal from reconstruction to development during 1950s. Less was needed for reconstruction and there was big need for new countries. Modern criteria for World Bank investments are now poverty reduction, access to healthcare, quality education, combatting diseases, investing in infrastructure.
