The rules of the international economy

Brad De Long delong at econ.Berkeley.EDU
Wed Sep 2 08:49:52 PDT 1998



>Clinton, amiably but firmly to his Russian hosts, yesterday - the big
>message -
>
>
>
>"There is no way out of playing the rules of the international economy if
>you want to be part of it."
>
>
>
>What are the rules of the international economy?

(1) That if you want to benefit from and accelerate your industrialization by borrowing on a large scale from the industrial core when investors in the core are optimistic about prospects out on the periphery, then you had better be ready to stabilize your economy when investors in the industrial core change their minds...

(2) That if you want to benefit from and accelerate your industrialization by borrowing on a large scale from the industrial core, then you had better be ready to take every step to reassure investors in the industrial core that their property will be safe and their profits large...

(3) That if you want to benefit from and accelerate your industrialization by participating in the web of international trade, then you had better take every step to reassure those whom you buy from that you will be a stable source of demand, and to reassure those whom you sell to that you will be a stable source of supply...

(4) That if you interested in raising the standard of living of your people, that you should pursue the globalizing path: if twentieth century history shows anything, it shows that countries that have aggressively pursued development strategies that focus on exporting to the industrial core and on importing modern capital goods from the industrial core have done much, much better than those that didn't--compare Italy to Argentina, or South Korea to India, or Mauritius to Cuba...

Brad DeLong



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