A Narrative Report on International Monetary System

Introduction:
The history of international trade is marked by the development of systems that facilitate the
flow of goods and services within the global community. This evolution was driven by the need
for an international monetary system that could standardize the valuation of traded goods and
services.
The concept of the international monetary system, as defined by John Lipsky (2010),
encompasses policies and official arrangements related to balance of payments. These include
exchange rates, international reserves, current payments, and capital flows. These mechanisms
play a crucial role in preventing balance of payments issues such as surpluses or deficits that can
affect a country’s international transactions.
Over the years, four major international monetary systems have been implemented. These
systems, as described by Cohn (2012), include the classical gold standard, gold exchange
standard, Bretton Woods system, and a mixed system of floating and fixed exchange rates. These
systems evolved in response to the changing dynamics of international trade and economic
conditions.

Table 7: International Monetary System

Monetary System Description

Classical Gold Standard The succeeding gold exchange standard showed a number of
characteristics that proved to be beneficial to the members of
the international community. One of the striking characteristics
of the gold exchange standard is that countries were allowed to
maintain both gold and a major currency as their international
reserves during the interwar period.
Gold Exchange Standard The succeeding gold exchange standard showed a number of
characteristics that proved to be beneficial to the members of
the international community. One of the striking characteristics
of the gold exchange standard is that countries were allowed to
maintain both gold and a major currency as their international
reserves during the interwar period.
 Bretton Woods system The classical gold standard collapsed during another
international The succeeding international monetary system
emerged as the result of the Bretton Woods conference that
marked the return of the international community to the gold
exchange standard. Compared with the previous gold exchange
standard, the new monetary system – the post-war gold
exchange standard-was spearheaded by the United States of
America together with Great Britain and other capitalist
countries.
Mixed system of Floating In a mixed monetary system, countries are allowed to choose
and Fixed Exchange Rates their preferred Fixed exchange rate that comes in the form of
either floating or fixed exchange rate system. After the Second
World War, several developed countries allowed their currencies
to float while the others opted for a fixed exchange rate system.

Body:
The classical gold standard was introduced in the early 18th century when Great Britain replaced
silver-based money with gold. This system was characterized by fixed exchange rates, where
national currencies were pegged to gold at an equivalent rate. Countries were required to
maintain their international reserves of gold to offset any balance of payments issues. This
system was widely adopted by countries like France, Germany and the United States, and
persisted for 35 years.
However, the First World War led to the collapse of the classical gold standard, paving the way
for the gold exchange standard. This system allowed countries to maintain both gold and a major
currency as their international reserves. Unfortunately, the gold exchange standard was not able
to achieve its objectives due to the Great Depression and the declining influence of Great Britain.
The end of the Second World War marked the establishment of the Bretton Woods system, which
returned the international community to the gold exchange standard. This system, spearheaded
by the United States and Great Britain, pegged the value of national currencies to gold or the
United States dollar. However, President Richard Nixon’s decision in 1971 to suspend the
convertibility of the United States dollar to gold led to the collapse of the Bretton Woods system.

Conclusion:
In conclusion, a mixed system of floating and fixed exchange rates was adopted. This system
allowed countries to choose their preferred exchange rate system. Developed countries like the
United States and Japan allowed their currencies to float, while many European countries
adopted a fixed exchange rate system. Developing countries generally chose a fixed but
adjustable exchange rate system.
The evolution of the international monetary system reflects the changing economic conditions
and needs of the global community. While no system is perfect, each provides options for
governments to improve their domestic economies and contribute to the stability of the
international monetary system. The choice of monetary system also indicates a country’s
approach to engaging in the international economy.

A Narrative Report on International Economic Constitutions

Introduction:
In the vast arena of global economics, international economic constitutions serve as the
cornerstone upon which nations build their economic relationships. This narrative report delves
into the intricate web of treaties, agreements, and institutions that govern international
commerce, exploring their impact on economies, societies, and individuals worldwide.

Body:
At the heart of international economic constitutions lie principles of fairness, reciprocity, and
cooperation. Treaties such as those established by the World Trade Organization (WTO), regional
trade agreements, and bilateral investment treaties provide the framework for cross-border
economic relations. They establish rules for trade liberalization, intellectual property rights,
investment protection, and dispute resolution mechanisms. However, the effectiveness of these
agreements often hinges on the political will of member states and the balance of power in global
governance structures.
Trade agreements are the engines that drive global commerce, facilitating the exchange of goods
and services between nations. They open markets, reduce tariffs, and harmonize regulatory
standards, fostering economic growth and development. Likewise, investment treaties provide
protections for foreign investors, encouraging capital flows and stimulating job creation.
However, the benefits of trade and investment can be unevenly distributed, exacerbating
inequalities within and between countries. Furthermore, concerns over labor rights,
environmental sustainability, and cultural preservation often collide with the imperatives of
economic integration.
As the global economy evolves, international economic constitutions face new challenges and
opportunities. Technological advancements, digitalization, and the rise of e-commerce are
reshaping the nature of trade and investment. Climate change and environmental degradation
demand a reevaluation of growth models and resource management practices. Moreover,
geopolitical tensions and protectionist tendencies threaten to undermine the principles of free
trade and open markets. In this dynamic landscape, international economic constitutions must
adapt to address emerging issues while upholding the values of inclusivity, sustainability, and
shared prosperity.

Conclusion:
As we navigate the complexities of international economic constitutions, it is imperative to
recognize their profound impact on the lives and livelihoods of people around the world. While
these agreements hold the promise of economic growth and development, they also pose
challenges in terms of equity, sustainability, and governance. By fostering dialogue, cooperation,
and inclusive decision-making, we can harness the potential of international economic
constitutions to build a more resilient, equitable, and sustainable global economy for future
generations.

A Narrative Report on Global Economic Instability

Introduction :

Let’s delve deeper into each of the global economic instabilities

In the intricate web of the international economy, stability is not a guarantee, and the smooth
flow of goods and services can be disrupted by a myriad of factors. This report will delve into the
historical instances of global economic instability that have left indelible marks on the world
economy.

The first major economic instability the world grappled with was the “Great Depression” of
1929. Originating from the United States and is considered one of the most devastating economic
recessions in history. Its exact causes are still debated by economists, but it originated in the
United States and lasted for a decade. During this time, economic activities slowed down,
leading to a halt in the production of goods and services. Consumer spending declined,
unemployment rates soared, and inflation rates rose. The American economy suffered a severe
collapse, leaving its people in a state of struggle. It was during this time that President Franklin
Roosevelt implemented the “New Deal” program, which aimed to revive the economy through
increased federal government spending and financial assistance to struggling companies. Slowly
but surely, the American economy began to recover with the help of the government and private
institutions.

Body:

Several years later, the world was hit by the “Oil Price Shock of 1973”, was a deliberate
economic experiment orchestrated by a group of oil-producing countries, known as OPEC, in
response to the United States’ support for Israel during the Yom Kippur War. These countries
expected support from the developed nations but were met with condemnation instead. As a
result, they suspended oil supplies, causing a major spike in global oil prices. The impact of this
shock was felt by developed countries, with the price of oil more than doubling within a year. To
mitigate the effects, many developed countries implemented domestic policies, including
tightening monetary policies. The situation began to improve when Israel decided to withdraw
from its occupied territories, leading to a resumption of normal oil production By OPEC
members.

The "Debt Crisis of the 1980s" originated In August 1982 when Mexico declared its inability to
repay its $78 billion debt to various lending Institutions. This declaration sent shockwaves
throughout the international community, as other developing countries were also on the verge of
defaulting on their financial obligations. Brazil, Venezuela, and Argentina were among the
countries that sought concessions and debt restructuring. The debt crisis can be traced back to the
aftermath of the oil price shock in the 1970s, which severely affected the financial standing of
heavily indebted developing countries. Irresponsible behavior by both lenders and borrowers, as
well as the dependence of southern countries on the north, contributed to the crisis. Many
developing countries found themselves trapped in a cycle of borrowing, leading to a deepening
financial crisis.
In 1997, the “Asian Financial Crisis” disrupted the impressive economic growth that Asian
countries had been experiencing. It began in Thailand when its currency underwent a major
devaluation, leading to a series of events that exposed the financial vulnerability of Asian
countries. Political favoritism allowed unchecked operations of certain companies, leading to
excessive borrowing and weakening financial liquidity. The moral hazard problem also
contributed to the crisis, as excessive borrowing by Asian countries during a period of financial
volatility led to currency depreciation and a widespread financial crisis. The crisis spread to other
neighboring countries, including Indonesia, South Korea, Malaysia, the Philippines, and
Singapore, causing massive capital outflows, currency depreciation, and a decline in stock
markets.

The most recent global economic instability, the "Global Financial Crisis of 2007," originated in
the United States with the subprime mortgage crisis in the housing market. In the 1990s, there
was a significant increase in housing prices and ownership in the U.S, attracting fresh capital and
raising profitability for subprime borrowers. However, when the demand for houses slowed
down, the housing market became problematic, leading to a decline in prices and an increase in
empty houses. This crisis was a result of factors such as excessive risk-taking, increased
borrowing by banks and investors, and regulatory and policy errors. The global financial crisis
had severe consequences, including bankruptcies and a global recession.

Conclusion:

In conclusion, the history of global economic instability is a stark reminder of the

interconnectedness of the world economy and the potential threats that can disrupt its stability.
It’s crucial for the international community to learn from these historical instances to prevent
similar occurrences in the future.

A Narrative Report on the Global North and South Drive

Introduction:
In the intricate tapestry of our global landscape, the divide between the Global North and the
Global South stands as a stark reminder of the disparities that shape our world. This narrative
report seeks to explore the dynamics of this divide, shedding light on the driving forces that
propel each region forward while also examining the challenges that hinder progress towards a
more equitable future.

Body:
The Global North stands as a beacon of progress, its cities pulsating with the energy of
innovation and entrepreneurship. Here, technological advancements and economic prosperity go
hand in hand, fueling a relentless drive towards growth and development. The North boasts
robust infrastructure, world-class education systems, and access to cutting-edge technology, all
of which contribute to its economic dominance on the global stage. However, beneath the veneer
of affluence lies a tale of inequality, where marginalized communities struggle to access the same
opportunities and resources as their more privileged counterparts.
Contrastingly, the Global South is a tapestry woven with the threads of resilience and
determination. In the face of economic hardship, political instability, and environmental
challenges, communities in the South display remarkable strength and ingenuity. Despite facing
formidable obstacles, they harness the power of community solidarity and local innovation to
overcome adversity. However, the road to progress in the South is often fraught with obstacles,
as limited access to resources, inadequate infrastructure, and institutional barriers hinder efforts
towards sustainable development and inclusive growth.
As we reflect on the narratives of the Global North and South, it becomes clear that their
destinies are intertwined. The challenges faced by one region reverberate across borders,
underscoring the interconnectedness of our global community. Bridging the gulf between North
and South requires a concerted effort to address the root causes of inequality and injustice, while
also fostering greater collaboration and solidarity across regions. Investments in education,
healthcare, and infrastructure are essential to leveling the playing field and unlocking the
potential of marginalized communities. Moreover, initiatives that promote sustainable
development and environmental conservation can help build a more equitable and resilient future
for all.

Conclusion:
In the grand tapestry of our world, the narratives of the Global North and South intersect and
intertwine, shaping the contours of our shared humanity. By acknowledging the strengths and
challenges of each region, we can work together to build bridges of understanding and
cooperation, forging a path towards a future where prosperity is truly inclusive and sustainable.