LESSON 61 THE NEW

Apuntes

LESSON 6: THE NEW INTERNATIONAL MONETARY SYSTEM AND THE GOLD EXCHANGE STANDARD BASED ON THE US DOLLAR 6.1 - ECONOMIC GROWTH, FINANCIAL STABILITY AND THE WELFARE STATE UNTIL 1971: A UNIQUE PHASE? • Virtuous circle: growth of supply and demand • Stage of mass diffusion of the Second industrial revolution technologies • Although the fast economic growth, inflation was moderate:  Wages didn ’ t increase more than productivity. Factors that restrained wages. Wage growth aligned with productivity. Wage increases didn ’ t translate into higher production costs per unit - even though workers were getting paid more, the cost to produce each item didn ’ t increase.  Cheap oil and raw materials . Oil prices remained low due to geopolitical stability and supply abundance, especially from the Middle East (Qatar ...)  Orthodox economic policies in the USA during the 1950s . Conservative policies - low - inflation, fiscally disciplined - not protectionism When these factors changed, the period of exceptional growth also got exhausted Bell curve of technology diffusion: - Phase 1: introduction . Technologies are being tested/invented. Limited diffusion (not wid...