Question

1. Discuss why a movement back toward the gold standard would NOT be advisable ( for this, I am not even going to give the option of it being advisable. A recent study by the National Bureau of Economic Research polled 100 economists. Not one felt the gold standard to be a viable option any more).

2. After reviewing the Glenn article, what are some of the issues discussed that threaten the current Bretton Woods-inspired international system? Explain in detail.

3. How has the Lahav article impacted your perspective on the refugee issue? Explain in detail.

4. Analyze the Olympic games, what would the Constructivist say about them? Explain in detail.

Answer 1

Question (1) Discuss why a movement back toward the gold standard would NOT be advisable (for this, I am not even going to give the option of it being advisable. A recent study by the National Bureau of Economic Research polled 100 economists. Not one felt the gold standard to be a viable option any more).

Under the Gold Standard, the value of a currency was directly linked to the amount of gold it had. These reserves over a period of time, would mean, even if the value of exports of a currency were not that high, it would get an edge because of higher gold standards and would maintain its currency levels significantly higher than other countries respectively.

Also, one of the major reasons for gold being delinked to currencies was how, USA dealt with the Great Depression problem of the early 1930's failing which it would have been in a major trouble which would have lasted further. Some experts even tend to suggest that over 90-95% of the recession was saved because of the government deciding to print currency, lower interest rates and be able to manage the currency without linking it to gold as a standard.

Fixed value of currency would mean countries would go on stacking gold which is not indicative of the overall health and therefore going back is not advisable. Further interest rates cannot be managed sometimes like in case of USA during the period of Great Depression without printing currency. A fixed system deters this.

Further, as explained a fixed system would largely impact the value of a currency without worrying about other factors such as exports and imports of products and services. In a fixed exchange system, as long as the country has higher gold reserves it would seem to be doing better due to higher valuation of currency whereas in reality this might not be true.