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The Global Economy from the Great Depression to the Great Recession

Author(s): Michael Jolly

Edition: 3

Copyright: 2018

Pages: 246

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Until very recently it was possible to believe that we were living in a new world in which the economic problems of the past had little or no relevance.   The subprime mortgage crisis of 2008, along with the subsequent ‘Great Recession’ and sovereign debt crisis, shattered this complacency.

The Global Economy: From the Great Depression to the Great Recession examines the worrisome similarities between these two periods.  By understanding how economic institutions developed, how the world economy has / and is still evolving, and through some familiarity with the similarities and differences between our current problems and the problems of the recent past, we gain a sense of perspective and some guidance as to the nature of the challenges facing the global economic system.

The Global Economy: From the Great Depression to the Great Recession:

  • Features an opening chapter that introduces some of the basic building blocks and terminology of international macroeconomics.
  • Provides an historical account of the international economy between the two world wars with an emphasis on the causes and economic consequences of the Great Depression of the 1930s.
  • Describes the Bretton Woods System of fixed exchange rates, which was in operation throughout the 1950s and 1960s, and the development of the international institutions that play such a prominent part in the international economy today.
  • Describes and discusses some current and recent developments in the global economy, including international crises, regional trade agreements, the ‘BRICS’ emerging economies, and the ‘development states’ of East Asia.

Chapter 1 Some Economic Concepts: Macroeconomics and the Global Economy
Some National Accounting Definitions
Trade and Protectionism
Comparative Advantage
Trade Restrictions
Tariffs and Quotas

The Balance of Payments
The Current Account
The Capital Account
The Financial Account

Exchange Rates
The Exchange Rate Model
Fixed and Flexible Exchange Rates
Managed Exchange Rates

Fiscal and Monetary Policy
Fiscal Policy
Monetary Policy
Fiscal Policy and Monetary Policy
Fiscal Policy and the Balance of Payments
Monetary Policy and Exchange Rates (The Trilemma)

SUGGESTED READINGS

Chapter 2 The First Era of Globalization
The First Era of Globalization and the Second Industrial Revolution
Globalization Through Imperialism
Africa
Asia
The Economic Effects of Imperialism

International Trade
Factor Mobility
Exchange Rate Stability and the Classical Gold Standard
Monetary Policy in the Era of the Gold Standard
Banks and Money
The Federal Reserve System
The Gold Standard and Monetary Policy

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Chapter 3 Legacy of the First World War
First World War and the Economic Role of Government
Immediate Costs of the War
Population Losses
Physical Destruction
Financial Effects

The Post-War Boom and Slump
Hyperinflation
Cause of the Hyperinflation
The End of the Hyperinflation
Gainers and Losers

Restoration of the Gold Standard
The Chain of Debt
Changing Patterns of Production and Demand
International Trade
Demographic Changes
Protectionism
Diminishing Trade
SUGGESTED READINGS

Chapter 4 The Great Depression
Introduction
The Depression in the United States
Contemporary Explanations
Nonmonetary Factors and the U.S. Depression

Monetarism and Wage Rigidity
The Monetarist Explanation of the Great Depression
The Effect of the Gold Standard
Criticisms of the Monetary Explanation

Wage Rigidity
Other Explanations of the Depression in the United States
Credit Hypothesis
Deflationary Expectations
The Stock Market Crash

Recovery and the Recession of 1937–38
International Aspects of the Depression
Protectionism
Kindleberger’s Financial Leadership Model
The Gold Standard

The International Economy, 1933–40
International Monetary Arrangements
Fiscal Expansion in Germany and Sweden
Monetary Expansion in Britain

The Great Depression and the Great Recession
SUGGESTED READINGS

Chapter 5 Bretton Woods and the International Institutions
The Legacy of the Second World War
The Marshall Plan and the European Payments Union
The Bretton Woods System
The Triffin Dilemma
The General Agreement on Tariffs and Trade
The World Trade Organization
The Rise and Fall of the Bretton Woods System, 1947–73
​Post-Bretton Woods
Labour and Environmental Issues and the International Institutions
SUGGESTED READINGS

Chapter 6 International Institutions and International Financial Crises
Macroeconomic Imbalances
Contagion
Globalization and Capital Mobility
Crisis Avoidance
Moral Hazard and the Basel Accords
Exchange Rate Policy

Role of the IMF and the World Bank
Major International Economic Crises Since 1980
The Debt Crisis of the 1980s
The Asian Crisis
The Subprime Mortgage Crisis of 2007 and the Great Recession

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Chapter 7 Regional Trade Agreements
Trade Creation and Trade Diversion
The North American Free Trade Agreement (NAFTA)
Canada and the United States
Mexico and the United States
The Impact of NAFTA

The European Union (EU)
Institutions of the EEC and the EU
Policy Issues
The Common Agricultural Policy (CAP)
Closer Integration
European Monetary Union
Expansion

The European Sovereign Debt Crisis
‘Taking a Haircut’
The European Financial Stability Facility
Fiscal Union
The Maastricht Treaty and the European Central Bank
Cyprus
Austerity
Financial Regulation
The Deeper Problem

​MERCOSUR
SUGGESTED READINGS

Chapter 8 Emerging Economies: The BRICS Countries
Russia
The Yeltsin Era
Putin’s Russia

China
Problems with Agriculture and Industry
Economic Reforms in China Since 1978
Continuing Challenges
Impact of China’s Expansion on the International Economy

China and Russia: ‘Shock Therapy’ Versus ‘Gradualism’
India
The Crisis of 1990
Brazil
Import Substitution and the Lost Decade
Brazil and the IMF

South Africa
SUGGESTED READINGS

Chapter 9 East Asia: The Development State
Economic Growth and Exports
Japan
The Japanese Economic ‘Miracle’
Economic Setbacks

The Emerging Economies of East Asia
Public Policy: The ‘Development State’
The Financial System
The Regulatory Framework and the Financial Sector
Recovery from the Asian Crisis

SUGGESTED READINGS

Chapter 10 The Middle East and Africa
OPEC and the Oil-Exporting States
The OPEC Oil Crises (1973 and 1979)
Non-Oil-Exporting States
Economic and Social Indicators
Demographic Transition
Religion
Legal Systems

The Arab Spring
Sub-Saharan Africa
Dependency Theory
Modernization Theory
Future Prospects

SUGGESTED READINGS

Index

Michael Jolly

Michael Jolly received his PhD from the University of Toronto after receiving degrees from Auckland University and the London School of Economics. He currently teaches in the Department of Economics at Ryerson University in Toronto and has previously taught at the University of Saskatchewan in Saskatoon and Auckland University in New Zealand. His primary research interests are in international economics, economic history, and the Asian economies.

Related ISBN's: 9781524949891, 9781524953508

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