Exam 1: Carter's Notes Flashcards
What is Adam Smith the founder of?
Free Markets
More exposure to international markets means ________
More government growth
Markets are not ______
self-creating, self-regulating, self-stabilizing, or self-legitimizing
What did Germany’s marriage or iron and rye do?
Created high import tariffs
What did the gold standard do?
Allowed money to flow freely between countries
Is free trade the natural order? Than why do it?
It is not, but it has long term benefits. Even if trade creates complications, the best way to deal with those is through other policies and not trade restrictions
What are some cases against free trade?
Protectionism is like ignoring technological innovations
What are some arguments for free trade?
- Even if some people lose out, it should be possible to compensate them, and still have everyone come out ahead
- The case for free trade goes beyond economies, it is a moral one that has to do with people’s freedom of choice
- Anti-trade views are prevalent enough already; we must present the other side
- The caveats will be hijacted by protectionists who will use them for their own purposes
- The nuances will confuse people
Did the GATT have good enforcement powers?
NO!
What happened in 1997 at the IMF meeting?
Developing countries were dismantling the controls they maintained over cross-border lending and borrowing.
Almost impossible to make foreign investments
What did IMF rules not cover?
IMF rules did not cover policies that regulated payments for international financial or capital transactions
What did East Asia do to fight the recession?
East Asia borrowed short-term in international financial markets to finance domestic investments
What was Bretton Wood’s Achilles Heel?
it didn’t define what will play the role of international money
It was US dollar, but US dollar was pinned to gold
Doubt of US dollar
Limited by amount of Gold
As world trade and finance expanded, the “policy space: that existing controls afforded ________
shrank and external constraints began to play a larger role
What is a fox?
A variegated take on the world
What is a hedgehod?
One central idea
What is the proximate cause of poverty according to Rodrik?
Low productivity
What are some other underlying causes of poverty according to Rodrik?
Lack of credit Lack of tech access Lack of knowledge/skills Small market size Exploitive elites
What does economic growth require?
Economic growth requires a pragmatic government willing to do whatever it takes to energize the private sector
What happened to trade in North America?
The state went from being a handmaiden of economic growth to the principal obstacle blocking it
Countries that are open to international trade are ______
2% faster growing
What are the seven principles for a New Globalization?
- Markets must be deeply embedded in systems of governance
- Democratic governance and political communities are organized largely within nation states, and are likely to remain so for the immediate future.
- There is no “one way” to prosperity
- Countries have the right to protect their own social arrangements, regulations, and institutions
- Countries do not have the right to impose their institutions on others
- The purpose of international economic arrangements must be to lay down the traffic rules for managing the interface among national institutions
- Non-democratic countries cannot count on the same rights and privileges in the international economic order as democracies.
What is a temporary work visa scheme?
Rich countries allow poor countries to send people to gain experience that can be taken back to their countries
