The Global Economic Order
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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. 
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Chapter 5: Coordination and conflict

Elli Louka

Abstract

This chapter provides a framework that help us understand why states may cooperate or conflict in economic affairs. Most states, most often, wish to pursue more growth by expanding their economies. That pursuit may motivate them to devalue their currencies to boost their exports. The resulting tit-for-tat devaluations may lead to economic conflict, trade war and isolationism. In other cases, state policies may diverge as some states try to grapple with inflation and asset bubbles and wish to contract their economies while others are bent on more growth. The externalities inflicted by the pursuit of domestic economic policies on other states and how these states deal with these externalities sets the stage for cooperation or conflict in international economic affairs.

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