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Teaching Module: Financial Statecraft: The Role of Financial Markets in American Foreign Policy

Authors: Benn Steil, Senior Fellow and Director of International Economics, and Robert E. Litan, Vice President, Research and Policy, Ewing Marion Kauffman Foundation
February 2006

As trade flows expanded and trade agreements proliferated after World War II, governments—most notably the United States—increasingly came to use their power over imports and exports to influence the behavior of other countries.  But trade is not the only way in which nations interact economically. Over the past two decades, another form of economic exchange has risen to a level of vastly greater significance and political concern: the purchase and sale of financial assets across borders.

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