The Global Economic Order
Show Less

The Global Economic Order

The International Law and Politics of the Financial and Monetary System

Elli Louka

Exploring in depth the institutions that underpin the global economy, this study provides invaluable insights into why a minimum economic order has endured for so long and why states are unwilling to establish a maximum order, a global safety net for all. The author investigates how debt – a critical component of states’ economic infrastructure – leads to debilitating crises, and how these crises undermine the economic autonomy and political independence of states. 
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 2: The Trilemma

Elli Louka

Abstract

In this chapter, we move into the world of two states. This simplified world allows us to explore how states make foreign economic policy by establishing an exchange rate between their currency and other currencies. We examine the balance of payments, an economic instrument that provides an in-depth look into the competitive advantage of states. We investigate whether free markets are capable of determining the ‘right’ exchange rate between currencies. We scrutinize how states intervene in the market to manipulate their currencies and increase their exports at the expense of other states. This chapter analyzes in great detail the concept of Trilemma: that states cannot maintain, at the same time, an independent domestic economic policy and a stable exchange rate, when capital is free to hop from state to state.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.