Growth in the Global Economy The Mathematician Matthias Production
Factor Evidence Impact Evaluation
USA Role Provision of liquidity through Marshall Plan:3-6% of recipients NY Opening up of market to absorb Western Europeans and Japaneses exports Provided Western European and Japan with military as well as security arrangement via NATO Facilitated rapid recovery Stimulated recovery Sustained demand to the point where by there is a export led boom (e.g. Western European export revenue:$8-$16 billion) Increased productivity Fall in militarily spending thus more resources can be channelled to the consumer sectors
State Intervention - Investing heavily on infrastructure (domestic economies) - Smoothen out cycles of boom and bust - Stimulus spending in times of growth - Reduce inflation
- Developed industries
- Brought about political and economic stability USA - This concept originated by the Isa during the Great depression and this was one of the main focus by many European nation to boost EG Bretton Woods System IMF - System of fixed exchange rate - Stabilized other countries BOP
GATT - Promote freer trade(trade Liberalization) - Stability and predictability in the exchange rate system thus creating a favourable climate for trade as well as investment - Tariff cuts allow the people to trade at a low cost
USA - Lion share of contribution to IMF and World Bank - Initiated GATT and all the negotiation that GATT underwent - Indirectly forces their allies to follow their currencies as having USD then was like having Gold
Growth in the Global Economy The Mathematician Matthias Production
Factor Evidence Impact Evaluation Liberalisation of Western Europe
Labour - Increased the number of migration from the less productive economy to more productive economy MNCs - Brought FDI into Western Europe and these FDI usually provided capital goods Labour - Promoted international division of labour which in turn increase productivity
MNCs - Capital + Skills + Jobs + Technological imports promote productivity and thus increasing the countrys nation income These control and stabilising force on increasingly liberalising and globalising world economy was provided by international coordination, led by the USA.
Most MNCs are US based and that by 1974, there are 125 US-based banks aboard. This shows how much the world rely on US for Investment especially so because the US-based MNCs provided these nations with $172 billion worth of goods and services. Availability of Cheap Oil Oil is the main of energy since it is cheaper as compared to petroleum - Middle East supplied 43% of European oil imports and by 1950 the figure was 85% - Consumption level (W.E) increased from 13.5% in 1950 to 32.3% in 1960 - Consumption level (Japan) increased from 6.5% to 39.6%
Reduce COP and thus fuelled the expansion of advanced industries USA - Political and diplomatic clout of the Americansthe Americans maintain good relations with the Middle Eastern Countries especially those in the OPEC so that these nations will helped them by providing cheap oils to these nations - This fuelled Western prosperity and enabled the US to promote the reconstruction of Western Europe and Japan
Growth in the Global Economy The Mathematician Matthias Production
Factor Evidence Impact Evaluation European Economic Recovery - Coordinate the post-war recovery in Europe ($1.6 billion flowed into Germany in the form of US credit for purchase of food and industrial raw material as part of Marshall Plan) - Expand market to sell products - Economic integration (allow the people in W.E to enjoy EOS) - Reduction of tariffs and quotas - Increased competitiveness - Sustain the gold standard USA - Economic clout of the USA - USA used their economic abilities to close up the economic gaps between them and the Western Europe so that they can gain trade benefit in the long run.
Sanjukta Dasgupta, Sudeshṇā Cakrabartī, Dipankar Sinha - Media, Gender, and Popular Culture in India - Tracking Change and Continuity-SAGE Publications (2012)