Cases in International Relations: Pathways to Conflict and Cooperation by unknow

Author:unknow
Language: eng
Format: epub
Tags: International Relations, Political Science, General
ISBN: 9781483310671
Google: hClzAwAAQBAJ
Goodreads: 26335580
Publisher: CQ Press
Published: 2014-02-26T00:00:00+00:00

The G20 Response to the 2008 Financial Crisis

The 2008 financial crisis did not come as a total surprise as the international monetary system has been shaken by a series of financial crises over the past several decades. For a number of reasons, however, monetary crises do not lend themselves to easy solutions. First, the international economic system is an arena of competition in which individuals, groups, firms, and governments vie for profits, jobs, prestige, and wealth. This competition creates winners and losers. Even if everyone gains, some will gain more than others. Too much competition can be dangerous and can create conditions under which the entire structure of the international economic system collapses, turning everyone into losers. This happened in the 1930s when countries tried to protect their domestic economies through the adoption of protectionist policies as the world slid into a depression. Instead of isolating themselves from global economic conditions, protectionism only made their domestic economic problems worse by inviting retaliation from other countries. Protectionism cut off competition from foreign goods, thereby saving jobs, but it also led to other countries closing off their markets, which resulted in lost jobs.

Second, monetary policy cannot be isolated from a country’s broader foreign and domestic policy agendas. One set of foreign policy issues affected by the onset of a financial crisis may be grouped under the heading of “rules of the game.” For example, prior to 2008 global economic relations were carried out according to what many called the Washington Consensus. Its central elements included fiscal discipline on the part of governments that minimized global indebtedness, free trade and investment policies, privatization and deregulation of businesses, and flexible exchange rates. The financial crisis discredited many of these ideas. In the realm of domestic politics, international financial policies may lead to growing poverty and citizen discontent due to the loss of export opportunities, decreased foreign investment, and the institution of austerity measures. Often the result is antigovernment protests that threaten government stability, such as in Argentina in 2000, when an estimated 80,000 protestors took to the streets.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.