BRETTON WOODS INSTITUTIONS, GLOBAL RECESSIONS AND THE MALAYSIAN ECONOMY
DOI:
https://doi.org/10.33736/ijbs.8193.2024Keywords:
Bretton Woods Institutions, Global Recessions, Financial Crises, Malaysian EconomyAbstract
The Bretton Woods Institutions of the International Monetary Fund (IMF) and the World Bank were established in 1944 to assist all countries to coordinate trade and investment towards supporting development. When Keynes orchestrated its launching, he had sought an egalitarian governance framework to support trade and investment. A fixed exchange rate mechanism was established to support trade and investment flows, and the settlement of balance of payment deficits, and debt. The early major fissure to such a system to threaten such a goal came in the form of the US withdrawing from the fixed exchange rate mechanism in 1971. It has since faced considerable contentions as many considered the US to enjoy asymmetric powers to shape the conduct of the IMF and the World Bank. The latest of such problems arose following the breakout of the Russia-Ukraine war in 2022 and the subsequent introduction of trade sanctions against Russia. This paper analyses the economic consequences of trade sanctions and their implications for the Malaysian economy.
References
Ahmed, S. (2022). Sanctions bite back at Germany, exposing the country to cold winter, TRT World, downloaded on August 17, 2023 from https://www.trtworld.com/opinion/sanctions-bite-back-at-germany-exposing-the-country-to-cold-winter-58810
Amsden, A.H. (1989). Asia's Next Giant: South Korea and Late Industrialization. New York: Oxford University Press.
BNM (2023). Overnight Policy Decisions, Bank Negara Malaysia (BNM), downloaded on August 8 from https://www.bnm.gov.my/monetary-stability/opr-decisions. BEA (2022). Gross Domestic Product, Fourth Quarter and Year 2022 (Third Estimate), GDP by Industry, and Corporate Profits, Bureau of Economic Analysis (BEA), United States, downloaded on August 17, 2023 from https://www.bea.gov/news/2023/gross-domestic-product-fourth-quarter-and-year-2022-third-estimate-gdp-industry-and#:~:text=Real%20gross%20domestic%20product%20(GDP,real%20GDP%20increased%203.2%20percent.
Bernanke, B.S. (2008). Remarks on the Economic Outlook, Speech delivered at the International Monetary Conference, Barcelona, Spain (via satellite), downloaded on October 12 from https://www.federalreserve.gov/newsevents/speech/bernanke20080603a.htm
Bernanke, B.S. (2015). How the Fed Saved the Economy, Brookings, October 4, Downloaded on August 1, 2023 from https://www.brookings.edu/articles/how-the-fed-saved-the-economy/
Cox, J. (2023). Fed approves hike that takes interest rates to highest level in more than 22 years, July 26, downloaded on March 27, 2024 from https://www.cnbc.com/2023/07/26/fed-meeting-july-2023-.html
Dellas, H. & Tavlas, G. (2018). Milton Friedman and the Case for Flexible Exchange Rates and Monetary Rules. Cato Journal, 38(2), 361-377. Accessed on 11 April, 2023 from https://www.cato.org/cato-journal/spring/summer-2018/milton-friedman-case-flexible-exchange-rates-monetary-rules
Dooley, M.P. (1994). A Retrospective on the Debt Crisis, NBER Working Paper No. 4963. https://doi.org/10.3386/w4963
ECB (2023). Monetary Policy decisions, European Central Bank (ECB), July 27, 2023 downloaded on August 17, 2023 from https://www.ecb.europa.eu/press/pr/date/2023/html/ecb.mp230727~da80cfcf24.en.html#:~:text=Inflation%20continues%20to%20decline%20but,target%20in%20a%20timely%20manner.
Feinstein, C.H., Temin, P. & Toniolo, G. (2008). The World Economy between the World Wars, Oxford: Oxford University Press.
https://doi.org/10.1093/acprof:oso/9780195307559.001.0001
Friedman, M. (1977). Nobel Lecture: Inflation and Unemployment, Journal of Political Economy, 85(3), 451-472.
https://doi.org/10.1086/260579
Garnaut, R., Song, L. & Fang, C. (2018). China's Forty Years of Reforms and Development 1978-2018, Canberra: Australian National University Press, http://doi.org/10.22459/CYRD.07.2018.
https://doi.org/10.22459/CYRD.07.2018
Hayek, F.A. (1944). The Road to Serfdom, Chicago: Chicago University Press.
Hilferding, R. (1910). Finance Capital: A Study of the Latest Phase of Capitalist Development, London: Routledge (first English Translation in 2006).
IMF (1971). Cooperation and Reconstruction. Accessed on April 8, 2023 from https://www.imf.org/external/about/histcoop.htm.
Jennings, R. (2023). How expanding China-led economic bloc Brics adds to the yuan's global clout, South China Morning Post, August 25, downloaded on September 8 from https://www.scmp.com/economy/china-economy/article/3232319/how-expanding-china-led-economic-bloc-brics-adds-yuans-global-clout
Keynes, J.M. (1920). The Economic Consequences of Peace, New York: Harcourt, Brace and Howe.
Krugman, P. (2009). The Return of Depression Economics and the Crisis of 2008, New York: W.W. Norton & Company. Kindleberger, C.P. (1986). International Public Goods without International Government, American Economic Review, 76(1): 1-13.
Lucas, R. (2004). Keynote Address to the 2003 HOPE Conference: My Keynesian Education, History of Political Economy, 36(5): 12-24. Project MUSE muse.jhu.edu/article/178080.
https://doi.org/10.1215/00182702-36-Suppl_1-12
Mahani, Z. A. & Rasiah, R. (2009). The Global Financial Economy and the Malaysia Economy, Monograph published by the UNDP, Kuala Lumpur.
Malaysia (2021). The Twelfth Malaysia Plan (2021-2025), Putrajaya: Government of Malaysia
Malaysia (2023). The Fourth National Industrial Master Plan, Putrajaya: Ministry of International Trade and Industry.
McKinnon, R. (1973). Money and Capital in Economic Development, Washington, D.C.: Brookings Institution Press.
New Straits Times Press (2023). Trade surplus falls 2.6 per cent in first half of 2023, July 20, downloaded on October 12, 2023 from https://www.nst.com.my/business/2023/07/932841/trade-surplus-falls-36-cent-first-half-2023#:~:text=KUALA%20LUMPUR%3A%20Malaysia's%20trade%20surplus,for%20the%20month%20of%20June.
Panic, M. (2003). The Bretton Woods System: Contents and Practice. In M. Panic, Globalization and National Economic Welfare, (pp 228-244). Palgrave Macmillan. (Reprinted from, Managing the Global Economy, pp 37-54, by Panic, M. in Michie, J. and Smith, J.G. (Eds.), 1995, Oxford: Oxford University Press). https://doi.org/10.1057/9780230286597_9.
https://doi.org/10.1057/9780230286597_9
Panic, M. (2003). Banking Supervision in Conditions of Deregulation and Globalization. In M. Panic, Globalization and National Economic Welfare, (pp. 208-227) Palgrave Macmillan (Reprinted from a chapter written in 1999 for a paper funded by the Department of International Development (DFID)). https://doi.org/10.1057/9780230286597_9.
https://doi.org/10.1057/9780230286597_9
Panic, M. & Manmohan, K. (2003). International Interdependence and the Debt Problem. In M. Panic, Globalization and National Economic Welfare, (pp. 191-207) Palgrave Macmillan (Reprinted from Structural Change, Economic Interdependence and World Development, by Borner, S. & Taylor, A. (Eds.), 1987, London: Macmillan). https://doi.org/10.1057/9780230286597_9.
https://doi.org/10.1057/9780230286597_9
Prange, A. (2023). A new world order? BRICS nations offer alternative to West. Deutsche Welle. Accessed on April 11, 2023 from https://www.dw.com/en/a-new-world-order-brics-nations-offer-alternative-to-west/a-65124269.
Rasiah, R. (ed) (2011). Malaysian Economy: Unfolding Growth and Social Change, Shah Alam: Oxford University Press.
Rasiah, R. (2018). Developmental States: Land Schemes, Parastatals, and Poverty Alleviation in Malaysia, Bangi: Universiti Kebangsaan Press.
Rasiah, R., Salih, K. & Cheong, K.C. (eds) (2022). Malaysia's Leap Into the Future: The Building Blocks Towards Balanced Development, Singapore: Springer.
https://doi.org/10.1007/978-981-16-7045-9
Rasiah, R. (2023). Beyond the COVID-19 Pandemic: Renewing Innovation Frontiers to Strengthen Sustainability, Singh, L. & Joseph, K.J. (eds), Reimagining Innovation Systems in the COVID and Post-COVID World, London: Routledge.
https://doi.org/10.4324/9781032633886-4
Shaw, E. S. (1973). Financial Deepening in Economic Development, New York: Oxford University Press.
Siripurapu, A. & Berman N. (2023, July 19). The Dollar: The World's Reserve Currency, Council of Foreign Relations, downloaded on September 8, 2023 from https://www.cfr.org/backgrounder/dollar-worlds-reserve-currency
Vethasalam, R., Carvalho, M., Yunus, A.. & Monihuldin, M. (2023, October 11). Dewan Rakyat: Fiscal Responsibility Act Passed, The Star, downloaded on October 12, 2023 from https://www.thestar.com.my/news/nation/2023/10/11/dewan-rakyat-fiscal-responsibility-act-passed#:~:text=The%20bill%20seeks%20to%20spell,%2C%20expenditure%2C%20loans%20and%20debt.
Stiglitz, J. (2010). Freefall: America, Free Markets, and Sinking of the World Economy, New York: W.W. Norton & Company.
Stiglitz, J. (2022). Wars aren't won with peacetime economies, Business Standard, October 22, 2022 downloaded on June 5, 2023 from https://www.business-standard.com/article/opinion/wars-aren-t-won-with-peacetime-economies-122102101462_1.html.
Statista (2023). Inflation rate in Germany from February 2022 to February 2023, March 2023, downloaded on August 17, 2023 from https://www.statista.com/statistics/262957/inflation-rate-in-germany-changes-of-the-cpi-compared-to-the-same-month-last-year/
Tepper, T. & Curry, B. (2023). Federal Funds Rate History 1990-2023, Forbes, July 25, downloaded on August 1, 2023 from https://www.forbes.com/advisor/investing/fed-funds-rate-history/
World Bank (2022). World Development Indicators, Washington DC: World Bank Institute.
Yergin, D. (1991). The Prize: The Epic Quest for Oil, Money and Power, New York: Free Press.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 UNIMAS Publisher
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
