The G20 Leaders Summit on Financial Markets and the World Economy took place on November 14–15, 2008, in Washington DC. Many commentators dubbed this meeting ‘Bretton Woods II’. Bretton Woods – Mark I was a meeting in the summer of 1944 that set out the foundations for the post World War II economic order. It set up a system of semi-fixed exchange rates and led to the establishment of the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF). Bretton Woods Mark II was perhaps less historically significant, but the world leaders agreed a plan to boost the world economy through tax cuts, higher public expenditure and lower interest rates; something Lord Keynes, the principal negotiator for the UK at Bretton Woods Mark I, would have wholeheartedly approved of!
G20 to back global tax cuts Times Online (16/11/08)
This week, our leaders have a chance to make the world anew Guardian (9/11/08)
A dangerous free-for-all Guardian (11/11/08)
Bretton Woods II – five key points on the road to a new global financial deal Guardian (14/11/08)
G20 summit: ‘The world economy is broken and they need to reflate’ Guardian (14/11/08) Podcast
Doubts raised over prospects of success for ‘hasty summit’ Guardian (15/11/08)
Our chance for a working regulatory regime Guardian (15/11/08)
Questions
- Write a short paragraph summarising the outcomes of Bretton Woods II.
- Assess the extent to which the fiscal and monetary stimulus agreed by the G20 leaders will be successful at minimising the depth of the global recession.
- Discuss the need for regulatory reform of the world financial system (as considered at Bretton Woods II).
- The G20 “signalled a determination to press on with the completion of the Doha world trade round”. Assess the extent towhich this is likely to be successful.
The surprise winner of the Nobel prize for economics this year was Paul Krugman: academic, writer and columnist for the New York Times. He is an economist with a gift for explaining economic principles and concepts in clear and simple terms. However, the award was given, not for his writing skills, but for his work on international trade theory and economic geography.
In praise of ….Paul Krugman Guardian (14/10/08)
Hotdog economics Guardian (13/10/08)
Nobel economics prize: And the winner is ….. Guardian (13/10/08)
Academic and columnist Paul Krugman wins Nobel Prize for Economics Times Online (13/10/08)
Bold strokes The Economist (16/10/08)
Questions
| 1. |
Write a brief paragraph summarising Krugman’s work on trade patterns. |
| 2. |
Define the term ‘economies of scale’. Explain why this concept was important to Krugman’s work on trade patterns. |
| 3. |
Assess the extent to which Krugman’s work has helped to explain the impact of free trade and globalisation. |
A recent report from the World Bank has suggested that developing countries need to grow significantly if they are to avoid high levels of poverty. The report suggested that without rapid and sustained growth up to 4 billion people could be living in abject poverty by 2050.
‘Choose growth or accept poverty for billions’ Guardian (22/5/08)
The Doha dilemma The Economist (29/5/08)
Questions
| 1. |
Summarise the main findings of the World Bank report. |
| 2. |
Is rapid economic growth (a) a necessary condition and/or (b) a sufficient condition for alleviating poverty in developing countries. |
| 3. |
Evaluate two policies that a developing country could adopt to raise levels of economic growth. |
Russia has been growing rapidly. Average earnings have recently been growing at 20% a year and consumption growth has not been far behind this. Moscow apparently has more ‘6-series BMWs’ than any other city in the world. With Vladimir Putin now the prime minister he has promised to rein in inflation and boost social spending on housing and infrastructure. So what are the prospects for Russia in the next decade?
Russia: giant of a new economic world order Observer (25/05/08)
Vladimir Putin pledges to transform economy of Russia into a world leader Times Online (9/05/08)
Putin in 2020 pledge on economy BBC News Online (8/05/08)
Questions
| 1. |
Assess the recent economic performance of the Russian economy. |
| 2. |
Examine the importance of oil to the Russian economy. What can the Russian government do to reduce the dependence on oil revenues? |
| 3. |
Discuss the importance of infrastructure and spending on other social capital for the development of the Russian economy. |
The market for rice has been in turmoil recently with shortages and rapid price rises. This crisis has led to Japan and the USA negotiating a deal to release the surplus rice held by Japan in silos. It is estimated that this deal would lead to around 1.5 million tonnes of rice being made available and this could help reduce the price of rice on global markets.
Japan’s silos key to relieving rice shortage Times Online (17/5/08)
Tokyo stockpiles rice while others go short Times Online (17/5/08)
Thai cartel idea outrages consumers Times Online (3/5/08)
Controlling crops goes against the grain Times Online (3/5/08)
Questions
| 1. |
Explain why Japan is holding surplus rice in silos. |
| 2. |
Assess the impact of this ‘distortion’ on the global rice market. |
| 3. |
With reference to the last two articles linked above, assess the likely impact of the cartel proposed by the Thai prime minister on the global market for rice. |