POLI 445 Lecture Notes - Lecture 6: Foreign Exchange Market, Unemployment Benefits, Trilemma
30 Jan 2018
School
Department
Course
Professor
Document Summary
Lecture 6 - wwi and the gold-exchange standard. What happened post-wwi: redistribution of economic capacity, political power and interests domestically. Second point - allies purchased war supplies abroad. In particular from the us, which required them to gather foreign exchange in the gov"s hands, and the need for us dollars: british government seized assets citizens owned to liquidate foreign investments to gather. Us dollars: third, allies borrowed from foreigners (especially from the us) Important shift in the american position vis a vis others - us becomes relatively capital abundant: us private banks and government starts to lend money, becomes a major creditor - Selling bonds, marketing it in the "patriotic fervor" - essentially buying debt from the. French wanted money from germany bc they owed debts (also wanted to slow the. Insist that british and french repay loans they took out from private banks: al: what are the structure of preferences, shared goals, but difficult to reach under new conditions.
