International Political Economy

Question 1

International Political Economy (IPE)

Answer 1

the study of international economic activities

Question 2

Bretton Wood Summit (1944)

Answer 2

called to address the needs of Western Europe after the war to repair their economy and infrastructure - lead to World Bank, IMF, and GATT

Question 3

Economic Liberalism

Answer 3

government policies that reduce the role of the state in the economy
includes: dismantling trade tariffs and barriers, the deregulation and opening of the financial sector to foreign investors, and the privatization of state enterprises

Question 4

Fiscal Policy

Answer 4

a governments decision about taxing and spending (according to economic liberalism, this should be weak)

Question 5

Monetary Policy

Answer 5

Manipulations by the central bank to control inflation and regulate the economy

Question 6

Interest Rates

Answer 6

The rates charged to private banks when they borrow from the central bank
High Rates: borrow less, save more, deflation
Low Rates: loans less expensive, borrow and spend more, growth of economy

Question 7

Comparative Advantage Trade Policy

Answer 7

states should specialize in trading goods that they produce with the greatest efficiency and lowest cost relative to other goods they can/do produce

Question 8

Export-lead Growth Trade Policy

Answer 8

international economic linkages are good for the economies of developing countries as they present important opportunities

Question 9

Marxism-Communism in IPE

Answer 9

the modern state is designed to serve the interest of the capitalist class
the economically stronger states (Global North) oppress and profit from the weaker ones (Global South), hindering their development

Question 10

Economic Nationalism

Answer 10

prioritization of the needs of the state over anything else, including the economy

Question 11

Nationalistic Economic Policies

Answer 11

small welfare state, private and public ownership, neither individual freedom or collective equality emphasized, international politics as a zero sum game, beggar-thy-neighbor policies

Question 12

Nationalistic Trade Policies

Answer 12

protectionism via tariffs and other trade barriers

Question 13

Import Substitution Industrialization (ISI)

Answer 13

a national development strategy that aviods international economic linkages to instead focus on domestic production

Question 14

Modernization Theory

Answer 14

reasons for economic underdevelopment are internal but by opening a state up to international investment and promoting a free market, an underdeveloped economy can take off

Question 15

Dependency Theory

Answer 15

reasons for economic underdevelopment are external, caused by the Global North’s exploitation of the south through unfair terms of trade agreements