Cold air pool atpl
Classified in History
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THEME II: The Development of the Global Economy
Growth of GE
ROLE OF THE US
- Providing post-war economic aid
> In 1946, Marshall Plan to Western Europe of US$13 billion
> 1/2 billion to Japan through Reverse Course Policy
> By 1952, economy of every participant state surpassed pre-war levels
> For all Marshall Plan recipients, output was 35% higher than in 1938
> In the 1950s, Western German exports increased by 500%
> US tolerated European and Japanese protectionism against itself
> Encouraged the export of technology through Technical Assistance Programme, funding European engineers and industrialists' visit to US mines and factories to bring home American advances
- Maintaining the 3 pillars of the Bretton-Woods System
> IMF ensured exchange rate stability through USD-Gold Peg, where USD was fixed in value to gold at $35 per ounce
> US provided more than 30% of IMF resources
> WB supplemented funds for private lending and international investments
> US half of the world's FDI of US$200 billion
> By late 1950s and 60s, Third World lending increased at over US$1 billion in new loans annually
> US promoted liberalisation of free trade in the GATT
> Principle of unconditional MFN treatment which required governments to automatically offer reductions in trade barriers for one country to all other countries
> Agreements to reduce trade barriers and tariffs
- RISE OF MNCS/TNCS
> By 2000, most TNCs were based in developed states with 85% of them in the US
> In 1973, 371 MNCs had branches in over 20 countries
> US had 2567 companies such as General Motors, Ford Motor, McDonalds
> Japan, 211: Sony, Toyota, Mitsui
> West Germany had 1222: Adidas, Volkswagen, Mercedes-Benz
CA:
> American MNCs dominated various countries such as
> IBM was 80% of Germany's computers
- EMERGENCE OF KEYNESIAN ECONOMICS
> Economic theory of free market with government intervention largely adopted by governments across the globe
> French government financed a new transport system for modernising machines of key industries such as steel and manufacturing
> British government provided social security networks, health insurance and pensions for workers
> Japanese government, under MITI, decided, charted and planned industrial and economic developments through various growth-driven policies
- OTHER FACTORS
> Growing liberalisation in the global economy through labour, entrepreneurship and free trade
> Cold War context increased economic competition through financial aids
> Abundance of cheap oil resources: world output doubled between 45-60, Middle East supplied 50% of world's demand, with oil prices as low as US$2 per barrel
> Advances in technology such as air travel and telecommunications
> EPU allowed free multilateral trade within OEEC and Japan's economic miracle