The New Order in Global Economy and Finance: from the Bretton Wood system to the successive waves of globalization

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[...] They differed in their implementation: the World Bank lends borrowed resources and finance projects while the IMF lends its own resources and supports countries with temporary loans. What are the reasons why the global economic crisis marked the end of the G7 era? - The G20 replaced the G7 as the key decision-making forum on global economic and financial matters On the 11th of October 2008, participation of George W. Bush to the G20 meeting of finance ministers revealed that the financial crisis was so intense that it could only be addressed with the direct involvement of the major emerging economies. [...]

[...] Therefore, the 2008 crisis led to an irrevocable power rebalancing in favor of the emerging powers. How have successive waves of globalization enhanced the need for international economic cooperation? - Increase of interconnectedness of the economic and financial system The waves of globalization have increased the interconnectedness of the global economic and financial system. The third wave of globalization and the "Great Convergence" (Baldwin, The Great Convergence) between industrialized nations and emerging economies, has lead to a radical transformation of value chain patterns made possible by the innovations in information technology. [...]

[...] The New Order in Global Economy and Finance: from the Bretton Wood system to the successive waves of globalization What were the key features of the Bretton Wood system ? - Dollar based exchange standard: Fixed but adjustable exchange rate vis à vis the dollar Following the Second World War all countries pegged their currencies to the dollar, the United States pegged to gold. The dollar was the only currency that could be exchanged to gold. The United States was at the center of the system as the dollar was the international payment and reserve currency. [...]

[...] Three of them, China, India and Brazil, benefitted from almost 2/3rd of the fall in the G7 share of the world economy. The loss of G7 relative economic weight was accompanied by a progressive decline in its legitimacy. - The key emerging powers seized the opportunity to demand a more important role in global governance which lead to a reform in international financial institutions The IMF was asked to play a major role in solving the crisis, this led the G20 to increase its resources. [...]

[...] There is a shared interest in preserving an orderly system supporting financial growth. - Cooperation is needed to ensure that the economic benefits of globalization are evenly distributed The rising disatisfaction has been accompanied by a rise in populism in Western countries since the 2010s. Populist leaders are against the multinational institutions and are more likely to pursue unilateral actions. Therefore, due to the interconnectedness of economies, cooperation between states is crucial to lead political reforms and ensure that the benefits from globalization are evenly shared between nations and at the domestic level. [...]