Lecture 3 - A Global Economy

Question 0

What is the two definitions of the World System Theory?

Answer 0

• interdependent system

- economic and politic links

Question 1

Who came up with the World Systems Theory?

Answer 1

Immanuel Wallerstein

Question 2

What are the 3 key features of the World Systems Theory?

Answer 2

1. A single world market
2. Hierarchy of economic, core, semi-periphery, periphery
   3: Long term change (cycles of economic development)

Question 3

What are Kondratiev cycles?

Answer 3

Capitalism as a series of cycles or waves (Adam Smith)

Question 4

Who is Kondratiev and what did he do?

Answer 4

Famous Russian economist, he built on the idea of capitalism in cycles in the year 1925

Question 5

What did Konratiev identify?

Answer 5

50 year long cycles of boom and depression for the capitalist world since mic C-18th

Question 6

Who updated Kondratiev in 2009?

Answer 6

Daniel Smihula

Question 7

What are the 6 waves of Daniel Smihulas updated theory?

Answer 7

1. (1609-1780) wave of financial agricultural revolution
2. (1780-1880) industrial
3. (1880-1940) technical
4. (1940 - 1985) scientific - technical
5. (1985-2015) info and telecommunications
6. (2015-2035?) - hypothetical post-info and technological

Question 8

What wave are we in now?

Answer 8

Information and telecommunications

Question 9

Name 4 reasons for the American Banking crisis?

Answer 9

1. Banks over lent and took on too much risk
2. US Housing bubble peaked in 2006
3. Banks lent mortgages to subprime households
4. US mortgages and banks linked to UK banks

Question 10

Name 4 things which happened when the solvency of banks were questioned?

Answer 10

1. Decline in credit availability and investor confidence
2. Stock market losses during 2008-2009
3. Economies slowed worldwide as credit tightened and trade declined
4. Govs consider austerity measures

Question 11

Name 3 causes of the Eurozone crisis?

Answer 11

1. Debt led consumption
2. Germany experienced wealth in recent years from export
3. Rapid growth in South Europe meant higher wages and consumption a so higher debt rations

Question 12

5 causes of the Eurozone Crisis on South Europe?

Answer 12

1. Credit restricted and more expensive
2. People paying more to service debts
3. Less disposable income = slowing of economy
4. High wages, price disadvantage, less exports to Germany
5. Needs money input or bailout

Question 13

Labour costs in a percentage of Germany in comparison to Spain?

Answer 13

100%

130%

Question 14

Trade deficits Ger and Spn in 2010?

Answer 14

6%

-5%

Question 15

Total Debt as a percentage of annual economic output in 2010? (Ger, Spn)

Answer 15

241%

355%

Question 16

5 reasons why China may be facing a collapse?

Answer 16

1. Lower disposable income in Europe = fewer opportunities to export
2. Chinese economy fuelled by real estate speculation
3. Explosion in debt levels
4. State owned monopolies correct losses by passing them on to customers
5. Lack of innovation