Transcript POL 4410: Lecture Five From Bretton Woods to Doha

POL 4410: Lecture
Five
From Bretton Woods to Doha
The 1970s
1. Nixon and the End of Gold
2. The Oil Shock and Developed States
3. The Oil Shock and Developing States
Nixon and Gold
• 1971 US abandons gold
standard
• Real appreciation led to
attacks on dollar in 1968
• Trade deficit led to two
choices
OIL and the OECD
• Oil prices quadruple in
1974
• STAGFLATION
• Unions and wage
increases
Stagflation in Action
OIL and the 3rd
World
• ISI States Hit
Particularly Hard
• Autocratic
Government
• Petrodollar triangle
1980s
1. Volcker Countershock
2. Change in Developed States
3. Debt Crisis in Developing States
Volcker
• Volcker appointed 1979
• Begins monetary
contraction
• Shift in political power to
investment class
Ideology and Technology in the
OECD
• Capital Market
Development
• Reaganomics
• Non Tariff Barriers
The Debt Crisis
• Lending in 1970s had
been in $
• Rise in $ led to default
• Western NTBs
prevented repayment
thru exports
1990s
1. Capital Crises
2. Trade Boom in the OECD
3. New Players among Developing States
Capital Crises
• European Monetary
System collapse
• Mexican Peso Crisis in
1994
• Asian Crisis in 1997
Trade Boom in the
OECD
• European
Community in 1992
• NAFTA in 1994
• WTO formed 1994
from Uruguay
Round
Developing Powers
• Fall of the Soviet Union
• Rise of China from 1979
• East Asia and South
Asia