Introduction to Political Economy

Global reserve system is explained as practice of keeping currency that is used for making international transactions. Reserve currency supports for buying imported items and purchasing goods and commodities in international market area. Present report is based on critical assessment of article “ The Unfinished Task of Bretton Woods: Creating a Global Reserve System”. The report describes about identification of article and brief summary of ranges, content and arguments of article has been mentioned in the report. Moreover, critical assessment and discussion of key issues that are raised in article has been mentioned.

ASSIGNMENT 1

OBJECTIVE

Present report is based on article titled as “The Unfinished Task of Bretton Woods: Creating a GloGlobal bal Reserve System”. This article has been written by Joseph E. Stiglitz and it does critical assessment of work done by Bretton Woods. The journal in which the article is mentioned is “Bretton Woods: The Next 70 Years”. This journal was published in the year 2015 and it has been published by The Reinventing Bretton Woods Committee. Inception of world bank and international monetary fund were two major initiatives that were taken for removing the status of UK from reserve currency system. After world war second a formal agreement names as Bretton Woods system was established for governing the international financial system. United state dollars were dominating marketing currency under this system (Messier, Puettmann, and Coates, 2013). It wGlobal as guaranteed by United state government that central banks can Global sell their existing reserves at a set cost for gold. The major objective for writing this article is to mention about success achieved in creating a global reserve system.

THEORY

In the present article Explicit theoretical framework has been used. This framework is used while writing an article and in the present article concepts have been mentioned with their specific definition and references from relevant and appropriate literature sources have been mentioned. A proper understanding of theories and concepts has been demonstrated in the article. Use of explicit framework in the article has supported in critically evaluating the whole subject. In adGlobal dition to this existing knowledge about the subject has been increased and more widened information about topic is found. Diverse aspects of selected topic have been mentioned in the article and information about key variables of subject has been mentioned. A detailed Reserve System.

INTRODUCTION

Global reserve system is explained as practice of keeping currency that is used for making international transactions. Reserve currency supports for buying imported items and purchasing goods and commodities in international market area. Present report is based on critical assessment of article “ The Unfinished Task of Bretton Woods: Creating a Global Reserve System”. The report describes about identification of article and brief summary of ranges, content and arguments of article has been mentioned in the report. Moreover, critical assessment and discussion of key issues that are raised in article has been mentioned.

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ASSIGNMENT 2

OBJECTIVE

Present report is based on aanalysis of past events and existing perspectives of global reserve system has been mentioned in details. The article has been assessed from various perspectives and it has supported in gaining detailed insight into the chosen topic.

CONCEPTS

In the article major achievement of Bretton wood system has been explained. Reasons behind creation of International monetary fund and world bank have been mentioned in detailed in the article. Global reserve system supported United Kingdom in getting rid from the status of reserve economy system. Establishment of international institution has supported in developing a global reserve system and US dollars have dominated in market (Broz, 2015). Role of United states in maintaining and developing economic institutions has been mentioned. UK has given the reserve currency to the US and due to that it becomes difficult for developing a global reserve system. Reasons for failure of global economic system also has been mentioned in the article with proper evidences. Principals of economies have been used for describing the lack of success in implementing the global reserve system.

ARGUMENTS

It has been mentioned in the article how failure of global reserve system has mentioned. Major reasons are lack of understanding of the principles that govern international economic system. It is the biggest reason that lead towards worse consequences in global reserve system. In addition to that failure in properly predicting evolution of global economy and responses of it are also some major reasons due to which it became difficult for implementing global reserve system. It was also inefficiency of political system that played a central and key role in implementing the global reserve system.

It is mentioned that it is assertive to rectify the reasons so that global reserve system should be implemented properly. However global environment is changing at faster pace and it is difficult to predict situations oReserve System

INTRODUCTION

Global reserve system is explained as practice of keeping currency that is used for making international transactions. Reserve currency supports for buying imported items and purchasing goods and commodities in international market area. Present report is based on critical assessment of article “ The Unfinished Task of Bretton Woods: Creating a Global Reserve System”. The report describes about identification of article and brief summary of ranges, content and arguments of article has been mentioned in the report. Moreover, critical assessment and discussion of key issues that are raised in article has been mentioned.

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ASSIGNMENT 3

OBJECTIVE

Present report is based on af global environment. Principles of economics provide better directions and guidance for successfully implementing the global reserve system (Hollifield, Martin and Orrenius, 2014). Political system also needs to be effective so that required objectives of reserve system should be accomplished effectively. There were some gaps which have been identified in Bretton wood system and it has been argued in the article that changes in global economic conditions have created such situations. Keynes' concern for the lack of aggregate demand has been described and consequences of this on the great depression system also has been described. Assumptions made by Paul Samuelson are explained and in the assumption it was mentioned that after world war second there will be recession in economy. Economic transformations were observed after that period and shifting and transitions that were happened in various industrial sectors have been mentioned. Productivity in agricultural sector started increasing and due to that people moved from agriculture to manufacturing in search of better employment opportunities . Proper evidences have been mentioned for describing about reasons for why US dollars got dominating position in global economy system. Influence of Marshall plan for making US the reserve currency country have been mentioned with appropriate reasons and evidences.

Effective and strong expansionary policies that were formed by government of US supported in transferring surplus of US to European countries. One more reasons that has been depicted is growth of inequality in consumer segments due to which aggregate demand in market increased. Bad consequences of 1997 crisis on developing nations and emerging market areas have also been described. Due to financial crisis economic independence of these countries was trapped and they became liable to IMF and other creditors (Lockwood, Worboys and Kothari, 2012). Arguments and points that are mentioned in the article are based on fundamental law of trade and as per the law it is required that sum of deficit must be equals to sum of deficit. It is described in article that if surplus nations would transfer their surplus funds to nations that are suffering from deficit than risk of deficit can be controlled.The major reason due to which US became the global reserve nation is that countries realized the risk of deficit and they are avoiding this fact. Arguments mentioned by some authors also have been explained in the present article.

Triffin has defined in a journal written by him that due to risk deficit confidence in global currency country reduces and due to which it becomes difficult for a country to maintain its position as a global reserve currency. A particular problem also has been explained in article and it defines that when there is demand for reserves by other nations than it renders high value for the reserve country and due to that aggregate demand decreases. It has been argued that it is critical for reserve country to maintain its full employment conditions and it can be done by executing investment boom (Riggirozzi and Tussie, 2012). However, if investment will outpace the aggregate demand than due to that it will become difficult for sustaining excessive capacity. It has been mentioned that US has tried a different way for handling this kind of situation and it adopted medium for running fiscal deficit. Three specific reasons have been mentioned about the fundamental problem of global demand.

The major reason is increasing inequality in majority of countries. Second reasons is shifting of trend manufacturing to service based industries. Due to which massive changes in global economic environment has been observed. It has been argued in article that Bretton Woods system has not properly grown and implemented and some new financial institutions such as Asian investment fund and BRICS bank failed in fulfilling the gap that were created by Bretton Woods system. However, no proper evidences have been mentioned for proving this point. It has also been argued in the report that there is long way forward for developing a global reserve system and it required a coordination and systematic approach (Panitch and Gindin, 2012). It has been explained in the article about methods that could be adopted for imparting pressure on US if the state tries for gaining benefit for being a global reserve system. It has been criticized that current financial system is unstable and there are risk associated about under-performance of global economic system. Author has focuses on giving emphasis to finishing the work of Bretton Woods.

METHOD

In the article qualitative investigation has been used and thematic analysis has been used for carrying out detailed analysis of the selected topic. It has supported in gaining required objectives and aims of selected topic and wide information and knowledge has been mentioned in article by making use of this approach.

EVIDENCES

While writing the article evidences have been provided for giving strength on the arguments provided in the article. Variety of studies have been used by referring work conducted by various authors. It has supported in gaining detailed information and knowledge about the selected topic and strong aspects of article has depicted by mentioning evidences under it.

VALUES

Value positions in article are clear and it displays about importance of finishing the gap that occur in Bretton Woods system. Major focus has been given to implement global reserve economy and need for it in today's fast changing global environment have been highlighted. A qualitative investigation have been carried out and reasons for failure of reserve economy system have been mentioned.

LITERATURE

The article provides detailed knowledge about gaps that remains in Bretton Woods system and requirement of global reserve system in unstable economic environment. The work conducted fits effectively into wider literature and in future it will provide detailed information for gaining detailed knowledge about the topic for researchers.

CONTRIBUTION

The work advance knowledge about the selected subject as detailed information with proper evidences have been mentioned in the article.

STYLE

Language used by Author is expressive and article has been presented in logical way with appropriate evidences. Material has been presented in accurately and clear manner and coherence and contrary evidences also have been mentioned. Material is organized properly and each topic has been discussed in details.

CONCLUSION

The article titled as “The Unfinished Task of Bretton Woods: Creating a Global Reserve System” effectively describes about gaps in Bretton wood system. Major reason for failure in implementing global reserve system has been described in coherent and rational manner by making appropriate use of evidences. In addition to that it provides detail understanding about methods that could be used for implementing reserve economy system in present unstable economic environment. Utility and validity and excellence of article are vary effective and it renders detailed understanding of the chosen subject. Work conducted is properly backed up with evidences and author has also expressed his opinions and arguments for carrying out logical interpretations. Need for developing reserve currency provisions and risk associated with current economic system has also been explained. Long term adverse consequences for US for being a reserve currency state has been mentioned effectively. More emphasis has been given in the article for completing the work of Bretton Woods system in today's fast changing global economic environment has been mentioned.

Impact of changing institutional arrangements in Europe and various problems associated with structural transformations have been described logically. Moreover, irony linked with failure of global economic system due to large increase in capital flow has been described in report. Overall objective of author for writing this article has been accomplished and detailed knowledge about the subject has been mentioned in the article.

REFERNCES

  • Broz, J.L., 2015. The Politics of Rescuing the World's Financial System: The Federal Reserve as a Global Lender of Last Resort. Korean Journal of International Studies. 13(2). pp.323-351.
  • Cantú-Salazar, L. and Gaston, K.J., 2013. The performance of the global protected area system in capturing vertebrate geographic ranges. Biodiversity and Conservation. 22(4). pp.1033-1047.
  • Hollifield, J., Martin, P. and Orrenius, P., 2014. Controlling immigration: A global perspective. Stanford University Press.
  • Humpage, O.F., 2015. Current Federal Reserve Policy Under the Lens of Economic History. Cambridge University Press.
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