IAFS 1000 Lecture Notes - Lecture 11: Special Drawing Rights, World Trade Organization, Trin
9 Aug 2016
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International money ii last lecture to be on test essay questions will be posted sunday nov 2. The impossible trinity: international capital mobility (icm) = Xed exchange rates imply delta e = zero have to move your interest rate to whatever world interest rate is i > i* = i < i* = 25% unemployment us, 44% germany collapse of international trade: smoot-hawley tari s rise of fascism in europe. Bretton woods conference in july 1944 (before wwii ended) (cid:12254) (cid:12254) (cid:12254) institutions created (cid:12254) led by us. 44 countries attended (delegates) goal was to create a set of institutions that would avoid repeat of 1930s: gatt set of free trade rules (replaced later by ito) in previous notes, fixed exchange rate system (cid:12254) Bretton wood system: there is a sequential logic to the institutions/systems with bretton wood, we chose fer and mpa (see triangle diagram) (cid:12254) Nixon ended us dollar convertibility to gold in 1971 (cid:12254)
