Rise of Global economy
Rise of GE
BWS
It formed the base of the GE as it provided the world with much needed currency stability in the post-war era. Under the system, all currencies were pegged to gold and since USA has 70% of gold reserves, the USD became a de facto currency of the world– 35USD to one troy ounce of gold. As gold prices does not fluctuate, the BWS provided a much-needed stability for monetary flows and thus the world saw an increase in trade and economic growth. It also created open markets to combat economic nationalism which was widely implemented by other countries and was detrimental to the idea of free trade. The BWS was thus a joint management of new economic and political order. Countries under the BWS embraced Capitalist ideologies and systems. It also enhanced the influence and prestige of US. To sum up, the BWS catalysed economic integration and led to the rise of MNCs, which is another factor.
MNC
The MNCs set up different manufacturing bases in different countries. The MNCs were important in spreading economic links of globalisation and helped the US to expand its global reach to more countries, hence increasing US strength and influence. The MNCs created globally-intergrated enterprises and brought skills and technology, FDIs and expertise to the rest of the world. It thus helped to industrialize economies and helped the world to progress together.
USA role
Dominant global power in political, economic, ideological aspects. Politically, it asserted political presence and dominated international organisations like UN, IMF and the World Bank to enforce a Capitalist system which eventually helped the world to progress economically as a whole. Economically, since USA was the least affected country by WW2, it was able to provide aid through monetary policies like the Dodge Plan to help Japan. The USA’s stable currency also provided a peg to stabilize other currencies.
Regionalism
Europe wanted to create unified regional bloc to act as a counter-balance
BWS
It formed the base of the GE as it provided the world with much needed currency stability in the post-war era. Under the system, all currencies were pegged to gold and since USA has 70% of gold reserves, the USD became a de facto currency of the world– 35USD to one troy ounce of gold. As gold prices does not fluctuate, the BWS provided a much-needed stability for monetary flows and thus the world saw an increase in trade and economic growth. It also created open markets to combat economic nationalism which was widely implemented by other countries and was detrimental to the idea of free trade. The BWS was thus a joint management of new economic and political order. Countries under the BWS embraced Capitalist ideologies and systems. It also enhanced the influence and prestige of US. To sum up, the BWS catalysed economic integration and led to the rise of MNCs, which is another factor.
MNC
The MNCs set up different manufacturing bases in different countries. The MNCs were important in spreading economic links of globalisation and helped the US to expand its global reach to more countries, hence increasing US strength and influence. The MNCs created globally-intergrated enterprises and brought skills and technology, FDIs and expertise to the rest of the world. It thus helped to industrialize economies and helped the world to progress together.
USA role
Dominant global power in political, economic, ideological aspects. Politically, it asserted political presence and dominated international organisations like UN, IMF and the World Bank to enforce a Capitalist system which eventually helped the world to progress economically as a whole. Economically, since USA was the least affected country by WW2, it was able to provide aid through monetary policies like the Dodge Plan to help Japan. The USA’s stable currency also provided a peg to stabilize other currencies.
Regionalism
Europe wanted to create unified regional bloc to act as a counter-balance