I don't understand what the problem was with international relations during the Great Depression when Franklin Roosevelt was president.
something about exchange-rate stabilization.
That FDR refused to take part in.
Mainly, I don't know what the problem was and how he tried to fix it?
Could someone tell me why FDR wanted inflation?
- because of the economic slump ?
During the Great Depression, international relations faced several challenges, and one major issue was exchange-rate stabilization. Allow me to explain the problem and Franklin Roosevelt's approach to addressing it.
Exchange-rate stabilization refers to the efforts made by countries to maintain stable exchange rates between their currencies. Stable exchange rates are important because they facilitate international trade and investment, ensuring predictability and reducing uncertainty for businesses and individuals.
During the Great Depression, many countries implemented policies to devalue their currencies in order to boost their exports and protect domestic industries from foreign competition. However, these competitive devaluations led to a beggar-thy-neighbor situation where all countries devalued their currencies simultaneously, making trade more difficult and exacerbating the global economic downturn.
To address this issue, international conferences like the World Economic Conference in 1933 were held to discuss potential solutions. At these conferences, participating nations aimed to achieve international cooperation in stabilizing exchange rates.
However, President Roosevelt refused to take part in these initiatives, primarily due to domestic political and economic considerations. One reason was the belief that the United States should focus on solving its internal economic problems before engaging in global cooperation. Furthermore, there were concerns that exchange-rate stabilization could potentially limit the flexibility needed to implement domestic economic policies.
Instead of participating in international efforts, FDR pursued a domestic agenda called the New Deal, which implemented various economic and social programs to combat the Great Depression within the United States. These programs included government spending, job creation, and financial reforms aimed at stabilizing the domestic economy.
FDR's approach can be seen as prioritizing domestic recovery over international cooperation, which some critics argue had both positive and negative consequences. On the one hand, the New Deal policies helped in reviving the US economy to some extent. On the other hand, the lack of international coordination prolonged the economic crisis on a global scale and hindered efforts to establish stable exchange rates.
In summary, during the Great Depression, the problem of exchange-rate stabilization emerged as countries resorted to competitive devaluations. Franklin Roosevelt chose not to participate in international efforts due to domestic considerations, focusing instead on implementing the New Deal policies to combat the economic downturn within the United States.