From the course: Navigating the Demographic, Economic, and Geopolitical Landscape as a Leader
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Trade and capital
From the course: Navigating the Demographic, Economic, and Geopolitical Landscape as a Leader
Trade and capital
- Trade and capital movements around the world where reorganized at the end of World War II under the so-called Britain Woods system, the U.S. committed to the goal of attaining free trading both goods and services and to encouraging other countries to do so. Meanwhile, the U.S. dollar became the leading international and reserve currency linked to gold at a fixed rate, with all other currencies pegged to the dollar at an adjustable rate. Two big changes took place in the 1970s. First, in 1971, President Nixon decided to bring dollar convertibility into gold to an end, so as to be able to spend more freely in the context of the Vietnam War and soaring fiscal deficits. This assert in the era of currency turmoil and volatility that lasted for at least three decades. The second big event took place one year later when President Nixon reestablished relations with China. Currency instability was, in my view, a bad development, incorporated in China into the global economy was good in the…
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