Money, Banking, and Financial Markets Essay Example | Topics and Well Written Essays - 2250 words - 2

Money, Banking, and Financial Markets - Essay Example According to the Economist (2015), the global monetary system has for a long time been the world’s greatest headache. The article justified this claim by recalling the gold standard that existed in the 19th century. The world financial system has been termed by economists across the continents as a headache because it plunged into the depression and predicaments in the 1930s. Besides, the after war Bretton Woods system of pegged exchange rate fell in the 1970s necessitating an unexpected replacement by a flexible or floating exchange rate and mobile capital (The Economist 2015). Also, Madeley accused the volatile global financial system of failing to support trade in products and manufactured goods. Trade in goods and manufactured products are not assisted, concerning growth, by the volatile world monetary system (Madeley, 2007). The argument here is that the fluctuating currencies in the global money markets imply increased uncertainty of developing countries that levels the actual amount of money that would be received for the goods sold by these developing countries. Thus, the fact that the western nations control the global financial system cause the third world’s greatest headaches by exploiting the system by causing inefficiency and injustice of the worldwide trading system. It is quite unfortunate that the western countries cause the headaches of developing countries but given little attention and effort to putting things right (Madeley, 2007)..