International finance and domestic politics: financial internationalization and the United States

This paper intends to show that the changes that occurred in the internationalcapital movements and monetary relations have transformed the domestic political economiesresulting in changes that have transformed the international political economy. Especiallyconsidering the United States, the author argues that the international economichegemony of U.S., after the World War Two, was based on three principal elements: massiveoutflows of long-term capital, a commitment to stabilizing the international monetary system,and commercial liberalization. These three elements had initially broad support, bothinside and outside the United States. However, when the financial and commercial opennessgradually changed the domestic economic orders, the political support for hegemonic stabilityeroded. For the author, the battle decided there will determine the very character of theU.S. and the international political economy for the foreseeable future. JEL Classification: F38; F32.