The term Beggar-thy-neighbor policy is a type of international trade policy that benefits the country implementing it while harming that country's neighboring states or trading partners . Originally, these policies represented a political solution to domestic depression and problems related to high unemployment rates. The basic idea of ​​the policy is to increase demand for domestic exports while reducing dependence on foreign imports. This means that domestic consumption increases, as opposed to the consumption of imports. It usually came with some sort of trade barrier; tariffs or quotas, or competitive devaluation, in order to lower the price of exports and push up employment and the price of imports. An import tariff will benefit the country because the tariff increases the nation's terms of trade. And therefore, it can be considered a “beggar-thy-neighbor” policy. Currency devaluations are considered to be Beggar-thy-neighbor as they are conducted solely for the purpose of boosting the country's exports by making them cheaper to purchase and thus increasing the country's global market share. The country's neighbors or trading partners that use Beggar-thy-neighbor devaluation might respond by devaluing their currency as well. This type of situation is known as competitive devaluation, which is an example of the “beggar-thy-neighbor” policy. Subsequently, wage repression policies could be assumed as Beggar-thy-neighbor if they primarily aim to increase a country's competitiveness in the international market while also pushing the country's competitors to suppress wages. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original EssayThe term Beggar-thy-neighbor politics was first used by the Scottish philosopher and economist Adam Smith, considered the founder of modern political economics. He used this term in his book The Wealth of Nations, in a criticism of the mercantilism that was the dominant economic system in Europe from the 16th to the 18th century and of protectionist trade policies. According to Smith, the doctrine of mercantilism taught that nations should beggar all their neighbors to maximize economic gains. He believed that the long-term gains from free trade would far outweigh the short-term benefits that might arise from the protectionist policies carried out by mercantilists. He argued that free trade would lead to long-term economic growth that would not be zero-sum, but would actually increase the wealth of all nations. Many countries have used beggar-thy-neighbor policies throughout history. They were very popular during the Great Depression of the 1930s, when countries vigorously tried to prevent the failure of their domestic industries. They adhered to the gold standard, pegging the value of their currency to the value of gold, engaging in a series of competitive devaluations. Additionally, many countries, including the United States, have imposed protective tariffs on imports. The “beggar-thy-neighbor” policy adopted in the United States led other countries to follow suit, resulting in a massive decrease in international trade. After World War II, Japan adopted a model of economic development that relied heavily on protecting its domestic industries from foreign competition until they were ready to compete with foreign firms. And, during the post-Cold War period, China has used a number of similar policies to constrain.