International Aspects of an Alternative Economic Policy

  • Karl-Georg Zinn
Part of the International Political Economy Series book series (IPES)


The following observations deal with the interconnections between the domestic and foreign economic aspects of employment policy. Thus it would be inappropriate to deal with foreign economic problems in isolation, therefore committing the same error as that made by economic policy recommendations which neglect the foreign linkages of domestic employment policy.


Interest Rate Central Bank Federal Republic Trading Partner High Interest Rate 
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  1. 1.
    See Elmar Altvater, ‘Der Kapitalismus im Aufschwung?’ Wirtschaft und Gesellschaft, vol. 8, no. 2/82: Expansion, Stagnation und Demokratie. Festschrift für Theodor Präger und Philip Rieger (Vienna: Econ, 1982) pp. 195–223; Google Scholar
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    See Ulrich Möller, ‘Die Gefährdung der Gatt-Ordnung’, Wirtschaftsdienst, vol. 62, no. 5 (May 1982) pp. 254–60; ‘Importhandel sieht dunkle Wolken aufziehen’, Süddeutsche Zeitung, 3 June 1982.Google Scholar
  13. 19.
    The increase in import elasticity reflects the level of international linkages of an economy and can be considered to be a normal development to the extent that growing export shares of the GNP lead to corresponding increases in import levels. What results from this, however, is a reduced domestic multiplier effect on the demand-orientated employment policy. Years ago, the OECD calculated in a model that an autonomous spending increase in the USA and Japan would have much higher domestic expansion effects (multiplier: 2) compared to the Federal Republic (multiplier: 1.6). See Lee Samuelson, ‘Economics Forecasting: The International Dimension’, OECD Observer, no. 79 (January–February 1976), pp. 17–21.Google Scholar
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    See the stimulating essay by Wilhelm Hankel, ‘Shylock gesucht: Hochzinspolitik und internationale Kreditmärkte’, Blätter für deutsche und internationale Politik, vol. 27, no. 5 (May 1982) pp. 591–605. Hankel sees national interest rates — that is, those substantially influenced by the central banks — as puppet movements in which the strings are pulled by the institutions operating on the international financial markets. Along with the lack of currency control over these markets and the balance-of payments deficits caused by OPEC price setting, their interest in interest rates leads to an expansion of international credit chains. He argues that this results in a dangerous increase in international indebtedness and risks for further granting of credits. Growing credit crises allow for the rise in ‘risk premium’ interest which subsequently, Hankel concludes, has an effect of national interest rates on credits. The question poses itself, however, as to why a growing international credit supply contributes to an increase in interest rates and why certain countries exhibit considerably lower interest rates than others, if the international interest association is so closely linked, as Hankel and others have maintained.Google Scholar
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    See Bank for International Exchange, Annual Report No. 51 (Basle: BIE, 1981);Google Scholar
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© William D. Graf 1992

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  • Karl-Georg Zinn

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