Identification Flashcards
Industrial Policy
refers to new government subsidies and public procurements to promote and protect the “national champions.” France and Japan had it, the U.S. steel industry asked for it (in vain)
National Champions
period between ‘60s - ‘80s when new approaches to trade emerged. Some of these approaches: government subsidies and public procurements (government paying private firms to do certain projects). The subsidies and procurements were to promote and protect “national champions” (i.e. companies/industries whose growth contributes to the development of the national economy)
Truman Doctrine
(1947) an American foreign policy initiative created to counter Soviet geopolitical expansion during the Cold War. In effect this meant that the USA would supply financial aid to countries at risk of being influenced by the Soviets (initially Greece and Turkey)
Pantouflage
refers to a practice by which high-level French civil servants obtain work in private enterprise. In use, the term can be applied to all civil servants, not just those who attain notoriety. In American contexts, this concept is known by economists as a revolving door.
Economies of Scale
with heavy industry emerging, the fixed costs to enter certain sectors are much higher than before (example: making airplanes or cars. Fixed costs = paying for materials, factories, machines, etc. for production).
Fixed Cost
business costs, such as rent, that are constant whatever the quantity of goods or services produced. Fixed costs for entering business are especially high in heavy manufacturing sectors (car making, steel smelting, etc.)
Fair Trade
conditional free trade. Allows for companies in disadvantaged countries to develop (catch up) to eventually compete regularly
EPU
(European Payments Union) During 1946-1958 period when Bretton Woods system was suspended, Europe set up the EPU. The EPU also forced liberalization by mandating that members eliminate discriminatory trade measures.
“Embedded Liberalism”
The system was set up to support a combination of free trade with the freedom for states to enhance their provision of welfare and to regulate their economies to reduce unemployment. The term was first used by the American political scientist John Ruggie in 1982.
Independent Monetary Policy
The ability of a country to determine its own monetary policy, as opposed to allowing the money supply to be determined by the exchange market intervention required to maintain a fixed exchange rate. (Was a component of the Bretton Woods system, but not the Gold Standard system)
Capital Controls
it represents any measure taken by a government, central bank or other regulatory body to limit the flow of foreign capital in and out of the domestic economy.
The Eurodollar Market
It is simply a short-term money market facilitating banks’ borrowings and lendings of U.S. dollars. And the market is principally located in Europe and basically deals in U.S. dollars.
State Banks
A financial institution that has been chartered by a state to provide commercial banking.
Transaction-Specific Trade
Trade now required large fixed investments (costs) (F) to produce good specifically for the foreign market. For example, 1970, Toyota of Japan was considering production for the US market; however, the US car-market had specific safety and pollution standards. Should Toyota invest in a factory in Japan making cars that could only be sold in the US?
Bipolarity
There were no durable alliances in the 19th-century multipolar system.
- In the postwar bipolar system, alliances are permanent.
- As a result, hegemonic or not, the US (and its allies) have a vested interest in trading with one another, for security reasons.
“Super 301”
A protectionist Congress passed a law requesting the President each year to designate and retaliate against countries with “unfair” trading practices. Japan, India, Brazil were designated first. Condemned as “unilateralism” by Canada, Paris, etc. US justified itself on the grounds that the GATT dispute settlement system was too weak and unenforceable.
