Lectures 13-15

Question 1

Interdependence

Answer 1

The description of reciprocal effects among states or other actors in different states.

Question 2

The Bretton Woods System

Answer 2

The creation of transnational economic institutions created in 1944 with the goal to rebuild the international economic system post-depression and from the affects of WWII.

Question 3

John Maynard Keynes

Answer 3

Economist that believed the solution to the Great Depression and economic instability was for the state to spend money (on projects such as building or social nets) during low economic periods and tax money during high economic periods (a form of wealth distribution)

Question 4

Friedrich Hayek

Answer 4

Economist who believed that the state can and should not regulate the market and that it would stabilize itself after the Great Depression.

Question 5

GATT/WTO

Answer 5

General Agreement on Tariffs and Trade/World Trade Organization - goal was to liberalize trade by reducing barriers such as tariffs, duties, and non-tariff barriers

Question 6

IMF

Answer 6

International Monetary Fund. The first institution created out of the Bretton Woods Agreement to regulate the international monetary system by setting conversion rates. Later began to provide money to states in economic crisis in exchange for the deregulation and liberalization of their economies.

Question 7

World Bank

Answer 7

International bank created to loan money to “developing” nations for projects that would “develop” them or increase their standard of life.

Question 8

Capital Market Liberalization

Answer 8

The change in the 1990’s to 2010’s where the global market liberalized and went beyond free trade to open financial markets and investments. Baby Boomers invest trillions and market managers search for new investment opportunities in the “developing world”

Question 9

Moral Hazard vs Systemic Risk

Answer 9

The idea that if a state bails out an investor on a failed investment it leads to riskier financial decisions that can lead to more frequent and worse crashes, but if the state does not, it can lead to systemic financial collapse

Question 10

Density of Networks

Answer 10

The “thickening” of globalism and growing complexity of networks, which intersect more deeply at many more different points.

Question 11

Complex Interdependence

Answer 11

The idea that the relations between states are becoming increasingly deep and complex, which undermines state power and elevates the influence of transnational non-state actors

Question 11

International Credit Crisis

Answer 11

The global financial crisis started by US institutions investing heavily in toxic assets which, due to global financial interconnectedness caused by globalization, spread to the rest of the world.

Question 12

Subprime Mortgage

Question 12

Toxic Assets

Answer 12

High-risk assets such as sub-prime mortgages, mortgage securities, adnd credit default swaps that had little to no regulation that no longer had a market

Question 13

Ben Bernanke

Answer 13

Chair of the Federal Reserve Board during the 2008 crash and a proponent of systemic risk theory.

Question 14

Henry Paulson

Answer 14

Republican treasury secretary during the 2008 crash and a proponent of moral hazard theory (until Bernanke convinced him otherwise)

Question 15

Mercantilism

Answer 15

The economic theory that trade generates wealth and it’s in the best interest of governments to export as much as possible and to
limit imports

Question 15

Critical IPE

Answer 15

Marxist theories of analyzing class in the international sphere, taking into account things such as low-cost labor and manufacturing.
Sensitivity in the global political economy to class, race, and gender, domination and subordination.

Question 16

Globalization

Answer 16

The social and economic process through which the borders of geography, national politics, and culture are overcome by global flows of capital, technology, investment, and trade at a highly accelerated rate

Question 17

International Political Economy

Answer 17

The study of how politics shapes the global economy and how the global economy shapes politics.