Overview
- Uruguay round
o A negotiation cycle of the GATT
GATT = General agreement on tariffs and trade
Trade regulations: goods, capital & currencies
- In times of limited trade volumes, international payments were done in silver & gold
- Increase in international trade: increase in transport of gold & silver
- Paper bills, coins & and agreement on how to convert these to gold and silver
o This was invented because carrying the gold and silver was very difficult due to the amount
and weight
International institutions
- IMF
o = International monetary fund
o Established to regulate the international money flows
- WB
o =World Bank
o =IBRD
= International bank for Reconstruction and development
o A bank for reconstruction and development
Is a lender for countries who are in need for development / reconstruction (mainly
after WW2)
o
- WTO
o World trade organization
o Also called ITO
WTO itself was born rather late 1990’s
Was started after the world wars in 1940’s
ITO was a forum to discuss the applied topics
o Regulate the flow of goods themselves
, Start of chapter / course
Historical overview
- League of nations (1919-1946)
o Goal was to stimulate the international cooperation and to ensure
international peace and security
o Experiences of hyperinflation in the 1920s as motivation to restore
the “gold standard”
Gold standard:
- Great depression and WW2
o The largest part of the current international financial system is re-
developed
IMF
World Bank
ITO (international trade organization
Now the WTO
Excursus: Exchange rates
- Exchange rate:
o Is the value of a currency when converted into a different currency.
o Changes in exchange rate can impact revenues, profits and
strategies of firms
o The exchange rate market is used for:
To convert currency of a nation A into currency of nation B
Offers insurance against exchange rate risks
The negative effect of unpredictable exchange rates
o Types of exchange rate:
Pegged exchange rate
BNG to EUR
It is a fixed exchange rate
The values don’t change
Managed floating exchange rate
EUR to DKK
Denmark isn’t part of the eurozone
o They didn’t want to join
= Trying to keep the exchange rate in a certain
bandwidth
- Systems of exchange rates used today
- Uruguay round
o A negotiation cycle of the GATT
GATT = General agreement on tariffs and trade
Trade regulations: goods, capital & currencies
- In times of limited trade volumes, international payments were done in silver & gold
- Increase in international trade: increase in transport of gold & silver
- Paper bills, coins & and agreement on how to convert these to gold and silver
o This was invented because carrying the gold and silver was very difficult due to the amount
and weight
International institutions
- IMF
o = International monetary fund
o Established to regulate the international money flows
- WB
o =World Bank
o =IBRD
= International bank for Reconstruction and development
o A bank for reconstruction and development
Is a lender for countries who are in need for development / reconstruction (mainly
after WW2)
o
- WTO
o World trade organization
o Also called ITO
WTO itself was born rather late 1990’s
Was started after the world wars in 1940’s
ITO was a forum to discuss the applied topics
o Regulate the flow of goods themselves
, Start of chapter / course
Historical overview
- League of nations (1919-1946)
o Goal was to stimulate the international cooperation and to ensure
international peace and security
o Experiences of hyperinflation in the 1920s as motivation to restore
the “gold standard”
Gold standard:
- Great depression and WW2
o The largest part of the current international financial system is re-
developed
IMF
World Bank
ITO (international trade organization
Now the WTO
Excursus: Exchange rates
- Exchange rate:
o Is the value of a currency when converted into a different currency.
o Changes in exchange rate can impact revenues, profits and
strategies of firms
o The exchange rate market is used for:
To convert currency of a nation A into currency of nation B
Offers insurance against exchange rate risks
The negative effect of unpredictable exchange rates
o Types of exchange rate:
Pegged exchange rate
BNG to EUR
It is a fixed exchange rate
The values don’t change
Managed floating exchange rate
EUR to DKK
Denmark isn’t part of the eurozone
o They didn’t want to join
= Trying to keep the exchange rate in a certain
bandwidth
- Systems of exchange rates used today
