Lindsey gives an example of how the current President Bush had made the improvement of the nation's schools as one of his top priorities in office. An educated American workforce means a sound human infrastructure, which will help secure foreign investments. The third aspect Lindsey points out is that the U.S. must make sure it engages in free trade with other nations. If there is no free trade environment there is no incentive for foreigners to invest in the U.S. currency. Therefore reciprocity must be maintained between nations during trade.
In contrast to Lindsey's defense of the strong dollar policy, Bergsten attempts to attack this policy head on before defending his own. In attacking this policy, he initially points out that a strong dollar policy was useful during times of economic progress. But now that the economy has significantly slowed down, it is no longer necessary to maintain anti-inflationary measures and to lower short-term interest rates any further. He also states that some of the benefits listed by Lindsey, such as seignorage and America's ability to use its own currency during international transactions, have gone on in the past during times of both dollar weakness and strength.
Bergsten points out that the strong dollar policy has led to America's enormous trade deficit, which led to U.S. manufacturers not competing well in the global market. This could force the U.S. To create domestic safe goods, which would involve momentarily suspending certain concessions made towards promoting free trade due to its slackening economy. One other adverse effect that the strong dollar policy would ultimately have upon the U.S. economy, according to Bergsten, is that it would inevitably cause the dollar to experience a sudden depreciation in value. This would lead to a dramatic drop in interest rates and to the plummeting of the stock market, which would spell trouble for the U.S....
The European Union also has its own version for corporate social responsibility. (Landau, 85) Thus the U.S. polity was forced to adapt international opinions and legislate both for the external and internal aspects of its economy. Human rights, labor laws and a host of international issues like global warming and the use of chemicals were all reflected in amendments of the local laws while some of the issues like
International Political Economy In recent years the presence of a global economy has become more apparent. Financial institutions throughout the world are now connected through a vast computerized network. As a result of this global economy issues associated with the international political economy has become an increasingly important issue. The purpose of this discussion is to explore the manner in which the three conceptions of the international political economy (Realism, Liberalism,
Investment in the "global economy" remains a domestic matter: The fact is, the total amount of the world's capital formation that is generated from foreign direct investment (FDI) has been less than 10% for the last three years for which data are available (2003-2005). In other words, more than 90% of the fixed investment around the world is still domestic. And though merger waves can push the ratio higher, it
They are used to the existing state-based system of commercial regulation, and there are several reasons why they might wish to maintain it. The advantage of using this system is that the MNCs know the system well, and the system uses effective tools for managing and currently provides them with significant leverage. They have proved adept at using leverage: globalization has forced firms to raise efficiency and adopt cost-minimization
It states that in order for this meeting to produce a successful outcome, America would have to play a leading role in making those difficult concessions. Towards the end of the article, a sense of optimism is displayed when it mentions about some of the minor breakthroughs that recently occurred, such as the narrow decrease in America's trade deficit in March 2005 and the May 4, 2005 agreement between
Marxist political economy looked more like critics on classical political economy proposed by liberalists, yet it didn't give any definite solution to the problem of political regulation of economics. Socialist theories of political economics which were derived from Marxist concept failed to effectively function on the territory of the certain state, and the economical situation in such countries as ex-USSR, Cuba, Vietnam and North Korea prove it perfectly. Now it
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