Literature review has found a debate about the impacts of hegemony to an open economic system. On one hand, authors such as Catley and Mosler (2007), Russett (2011) and Baker (2011) confirm positive role of hegemonic states in achieving macroeconomic stability in global scale. The main justifications behind this stance relate to hegemon serving as role model for other states and playing an instrumental role in creation and facilitation of monetary and trade regimes.
Supporters of this viewpoint offer various examples to justify their view. Specifically, these examples include positive implications of the British hegemony in the 19th century to trade liberalisation, and reductions on the level of free trade in the global scale after the decline in British hegemony 1875 onwards (Catley and Mosler, 2007).
Moreover, Russett (2011) argues that absence of hegemonic state within the period between the two World Wars has resulted in intensification of economic protectionism in many countries, and the situation has escalated to give rise to the emergence of the Great Depression. Russett (2011) further argues that macroeconomic stability has been achieved in many countries only after the emergence of the US as a powerful hegemon upon the completion of the World War II.
According to this approach, the role of hegemonic states in global macroeconomics can be represented through the following points (Baker, 2011).
a) Maintaining stabilised macroeconomic situation;
b) Enforcement of free economy rules though the use of influence;
c) Encouraging other counties to eliminate barriers to international trade;
d) Contributing to the growth of national economies of other countries through imports
On the other hand, sceptical approach towards the benefits of hegemonic states to macroeconomic stability and international trade has been expressed by Schake (2009) and Nye (2011). According to this group of authors bargaining and cooperation between countries is more effective compared to the influence of hegemonic states in terms of benefiting from international trade and macroeconomics.
Range of means and instruments available to hegemonic countries to influence the macroeconomic stability include relative large size of the market, impacts of its natural currency, and high levels of mobility of national economy of a hegemonic state (Catley and Mosler, 2007, Zhang, 2012).
Baker, A. (2011) Constructing a Post-War Order: The Rise of US Hegemony and the Origins of the Cold War, Tauris & Co.
Catley, R. and Mosler, D. (2007) The American Challenge: The World Resists US Liberalism, Ashgate Publishing
Nye, J.S. (2011) The Future of Power, Perseus Books Group
Russet, B.M. (2011) Hegemony and Democracy, Taylor & Francis
Schake, K.N. (2009) Managing American Hegemony: Essays on Power in a Time of Dominance, Hoover Press
Zhang, B. (2012) Chinese Perceptions of the US: an exploration of China’s foreign policy motivations, Lexicon Books