chapter 5 Flashcards
Mercantilism
An economic theory and a political ideology opposed to free trade; it shares with realism the belief that each state must protect its own interests without seeking mutual gains through international organizations.
Economic liberalism
An alternative approach, generally shares with liberal internationalism a belief in the possibility of cooperation to realize common gains. It holds that, by building international organizations,institutions and norms,states can mutually benefit from economic exchanges.
Free trade
The flow of goods and services accross national boundaries unimpeded by tariffs or other restrictions.
balance of trade
The value of a states exports relative to its imports
Comparative advantage
The principle that says states should specialize in trading goods that they produce with the greatest relative efficiency and at the lowest relative cost(relative, that is, to other goods produced by the same state).
autarky
A policy of self reliance avoiding or maximizing trade and trying to produce everything one needs(or the most vital things) by onself
Protectionism
The protection of domestic industries against international competition, by trade tariffs and other means.
ward off
to prevent someone or something unpleasant from harming or coming close to you:
In the winter I take vitamin C to ward off colds.
dumping
The sale of products in foreign markets at prices below the minimum level necessary to make a profit
Tariff
A tax imposed on certain types of imported goods(usually as a percentage of their value) as they enter the country.
Nontariff barriers
Forms of restricting imports other than tariffs, such as quotas (ceilings on how many goods of a certain kind can be imported).
World trade Organization
A global, multilateral intergovermental organization that promotes,monitors and adjudicates interantional trade.
General agreement on Tariffs and trade(gaat)
A world organization established in 1947 to work for freer trade on a multilateral basis;the GATT was more of a negotiating framework than an administrative institution.
Doha Round
A series of negotiations under the world trade organizations that began in Doha Quatar in 2001.It followed the Uruguay Round and has focused on agricultural subsidies,intellectual property and other issues.
North American Free trade Agreement(NAFTA)
A free trade zone encompassing the United States, Canada, and Mexico since 1994.
Organization of the Petroleum Exporting Countries (OPEC)
The most prominent Cartel in the international economy;its members control about half of the world’s total oil exports, enough to affect the world price of oil significantly.
Centrally planned economy
An economy in which political authorities set prices and decide on quotas for production and consumption of each commodity according to a long term plan.
Transitional economies
Countries in Russia and Eastern Europe that are trying to convert from communism and capitalism,with various degrees of success.
Hyperinflation
An extremely rapid,uncontrolled rise in prices, such as occured in Germany in the 1920s and in some thrid world countries more recently.
Fixed exchange rates
The official rates of exchange for currencies set by governments ;not a dominant mechanism in the international monetary system since 1973
Floating exchange rates
The rates determined by global currency markets in which private investors and governments alike buy and sell currencies.(there is supply and demand for each state’s currency)
devaluation
A unilateral move to reduce the value of a currency by changing a fixed or official exchanged rate.
bretton woods system
A post world war II arrangement for managing the world economy established at a meeting in Bretton Woods, New hampshire,in 1944.Its main institutional components are the world bank and the international monetary fund(imf)
World Bank
Formally the international bank for reconstruction and devellopment (IBRD), an organization that was established in 1944 as a source of loans to help reconstruct the european economies.
International monetary fund(IMF)
Coordinates international currency exchange, the balance of international payments , and national accounts.
balance of payments
A summary of all the flows of money into and out of a country.It includes three transactions:the current account (including the merchandise trade balance), flows of capital and changes in reserves, which make the national account balance.
Keynesian economics
The view that governments should sometimes use deficit spending to
Fiscal Policy
A governments decision’s about spendong and taxation
Multinational corporation
A company based in one state with afiliated branches or subsidiaries operating in other states.
Developing countries
States in the global south, the poorest regions of the world.
Millenium developmental goals
The UN adopted targets for basic needs measures to be achieved by 2015.
Subsistence farming
Rural communities growing food mainly for their own consumption rather than for sale in local or world markets.
Cash crops
Agricultural goods produced as commodities for export to world markets.
Migration
Movement between states.
Refugees
People fleeing their countries to find refugee from war,natural disaster, or political persecution.International law distinguishes from migrants.
Remittances
Money sent home by migrant workers to individuals(usually relatives)in their country of origin.
Resource curse
The difficulties faced by resource rich developing countries, including dependence on exporting one or a few commodities whose price fluctuate, as well as potentials for corruption and inequality.
Neocolonialism
The continuation ina former colony, of colonial exploitation without formal political control.
dependency theory
A theory that explains the lack of capital accumulation in the third world.These scholars define dependency as a situation in which accumulation of capital cannot sustain itself internally.
enclave economy
A historically important form of dependency in which foreign capital is invested in a third world country to extract a particular raw material in a aparticular place- usually mine, oil, well or plantation.
Newly industrialized economies
Third world states that have achieved self-sustainable capital accumulation,with impressive economic growth.
four tigers/four dragons
The most successfully newly industrialized areas of east Asia:South Korea,Taiwan,Hong Kong and Singapore.
Microcredit
The use of very small loans to small groups of individuals, ofthen women, to stimulate economic development.
Technology transfer
Third world’s states acquisitionof technology(knowledge,skills,methods,designs,speciallized equipment,etc.) from foreign sources, usually in conjunction with direct foreign investment or similar operations.
Brain drain
The problems of losing skilled workers to richer countries(this has impeded economic development)
IMF conditionally
An agreement to loan IMF funds on the condition that certain government policies are adopted. Dozens of third world states have entered into such agreements with the IMF.
Foreign assistance
Money or other aid made available to third world states to help them speed up economic development or meet humanitarian needs.
billateral aid
Government assistance that goes directly to third world governments as state to state aid.
Multilateral aid
Government foreign aid from several states that goes through a third party, such as the UN or another agency
UN Development Program(UNDP)
A program that coordinates the flow of assistance through the UN and manages 6000 projects at once around the world(focusing on technical development assistance)
Peace Corps
An organization started by President John Kennedy in 1961 that provides U.S volunteers for technical development assistance in third world states
Oxfam America
A private charitable group that works with local third world communities to determine the needs of their own people and to carry out development projects.Oxfam does not operate the projects but provides funding to local organizations to carry them out.
