Submitted by: Submitted by Ktinajero
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Words: 668
Pages: 3
Category: World History
Date Submitted: 01/14/2013 08:43 AM
EXAM---10? (6-10 sent): written & essay
2hrs
topics:
what Washington Consensus(Neo-Liberalism):3stages,policies
know why Reagan and admin. aggressive in promoting the Washington Consensus? to keep paying its debt to the northern commercial banks, the IMF, and the World Bank
3 stages:
• Stabilization: curbing inflation- cut public spending & raise interest rates, wage controls. 2nd objective was to keep paying its debt to the northern commercial banks, the IMF, and the World Bank
• Structural Adjustment: remove distortions such as price controls or trade tariffs, deregulation,
• Export-Led growth: diversify and find new markets for products
• Stabilization- curbing inflation & generate trade surplus to maintain debt payments
o Policies:
• Reduce money supply by cutting public spending
• Raise IR
• Depress/Control wages
• Structural Adjustment- “getting prices right” by getting state out of the economy-“marketization”
o Policies:
• Deregulate
• Reduce tariffs
• Remove price control
• Eliminate subsidies
• Restrict trade unions
• Eliminate deficits
• Floating (lender valued exchange rate)
• Export-Led Grants- back to commodities
o Policies:
• Priority to exports
• Diversification subsidies to non-traditional exports (salmon, shrimp, veggies, wine, etc)
• Suppress domestic demand
• Remove trade barriers
• Encourage foreign investment (DFI)
• Lender valued exchange rates
Washington Consensus
a neo-liberal view of globalization. The framework included:
• Fiscal discipline - strict criteria for limiting budget deficits
• Public expenditure priorities - moving them away from subsidies and administration towards previously neglected fields with high economic returns
• Tax reform - broadening the tax base and cutting marginal tax rates
• Financial liberalization - interest rates should ideally be market-determined
• Exchange rates - should be managed to induce rapid growth in non-traditional exports
• Trade...