ABSTRACT
This chapter argues that although the hegemon and the rules governing trade and capital movements have changed over the post-World War II period, the main features of the liberal economic order have endured. The purpose of the monetary subsystem is to provide a means to conduct transnational economic transactions. Foreign direct investment means that a corporation or investor owns a share in economic units in other countries. The United States gained economic preeminence in world markets, especially in Western Europe and Japan, through foreign investment. The governments of economically developed countries substantially relaxed controls on international capital movements in the 1980s. The process of reducing restrictions on international capital flows in the triad really began with the creation of the Organization for Economic Co-operation and Development in 1961. The liberal economic order has weathered shocks such as the oil crisis, exchange rate fluctuations, and the debt crisis.
