Foundations II Power Points Braun

Question 1

The First wave Globalization started…

Answer 1

In 1820 and lasted till 1914, though it has also been referred to as the great specialisation by Meissner.

Question 2

The First wave of globalisation started because…

Answer 2

of declining transport costs mainly, allowing for increased goods exchange and, as shown by the evidence, commodity price convergence

Question 3

Economic geography and trade costs follow what shape

Answer 3

An inverse u between pre 1840s and today.

Question 4

What happened after the break down of bretton woods?

Answer 4

• Formally, it became allowed to apply every kind of monetary system for
  members of the IMF in 1976
• Many countries switched to “floating”

Question 5

Floating

Answer 5

• Plaza accords 1985 “cartel of banks”
• Central banks influence exchange rates with their own demand/supply
  operations-
• Free flow of currency, convertibilty, exchange rates change by „supply and
  demand“ on international currency markets

Question 6

IMF’s new role in the international monetary order

Answer 6

• Jamaica Conference of 1976.
• lost its role in stabilizing the monetary order.
• Active in negotiating sovereign debt crises in the 80s.
• established Washington Consensus.

Question 7

The Heckscher-Ohlin model (H-O) shows.

Answer 7

How trade occurs because
countries have different resources, or endowments.

Question 8

H-O assumes:

Answer 8

technologies are the same across countries, but that
countries differ in their resource endowments.
This is aimed at explainung specialisation patterns based on it.