FINALS WEEK 7: INTERNATIONAL FINAL INSTITUTIONS, MARKET INTEGRATION, AND POWER BLOCKS

ECONOMIC ANATOMY:

  1. Primary Sector - extracts raw materials

    1. Raw materials should be of high quality while still being affordable

  2. Secondary Sector - manufacturing goods

    1. machine intensive

    2. labor intensive

  3. Tertiary Sector - focuses on service

MARKET INTEGRATION:

  • removal of barriers between two markets for the same product so that prices become closely linked

  • there are structures such as

    • free competition where there is no need for advertisement

    • oligopoly where there are few producers around 5-10

    • monopoly

    • mercantilism - gold and silver deposits

Blueprint for stability: Bretton woods (1944) - after ww2

5 structural elements

  • par value - currencies expressed in terms of gold value

  • monetary authority - central banks exchange currency at established

  • the overseer - establishment of the IMF to monitor exchange rates

  • open trade

  • anchor