The international finance structure and the IPE of international Debt Essay

The international finance structure and the IPE of international Debt - Essay Example Firstly, chapter 7 denotes the fact that international political economics and the agreements that are associated with it deal with political and economic agreements. As the name implies, development, debt, trade, and resource requisition and distribution are a core complement of the way in which international political economics is currently defined and practice. However, more than just monetary and financial decisions, power politics, namely forcing one state or entity to engage in international political economics to a different degree or extent that they might otherwise be willing, is a fundamental complement of the way in which international political economics is currently defined. Another salient factor that helps to constrain and define the way in which international political economics takes place within the current world is currency rate. Ultimately, even though economic decisions can be made with regard to X product being purchased at any price, the role and extent to whic h exchange rates impact the decisions that international political economics incurs are extraordinary. The impact that the dollar has on setting supply and demand ratios and equilibrium point is profound. However, even though this power is profound, the demand for the dollar is not something that is set in stone. Although the United States government necessarily has a great deal of latitude in respect of the amount of dollars that are in global circulation and â€Å"supply,† the demand for these dollars fluctuates based upon fear or confidence, restricting or expanding the global economy as a function of this faith or fear in the international currency of exchange. An approach that the chapter references with regard to the way in which international political economy is currently defined concerns global economic factors. What is meant by this is that even though the preceding analysis has been wholly concentric upon the way in which state actors can influence the global polit ical economy, the fact of the matter is that non-state actors, indeed individuals, can have a profound impact on the evolution and development of international political economics itself. For instance, currency speculation is one manner through which an individual, or a group of individuals, can have a deep impact on the currency exchange rate and/or an overall level of trust or belief in a given currency. History is replete with examples of individual investors, and groups of investors, that had been able to successfully shake competence or boost confidence in a given currency, and thereby fundamentally alter the way in which international political economics takes place. Although these situations are somewhat less important than the governmental/state decisions that have thus far been discussed and analyzed in terms of supply and demand of a given currency, they are nonetheless definitive and important in determining the future of the international political economic system. Where as chapter 7 is effective in helping to give an overview of the internatio