Notes 5.2 Flashcards
Rostow’s stages of economic growth (based on what theory)
theory that describes how countries shift from traditional to modern economies
based on “modernization theory”
- an idea with the right conditions, all countries can achieve economic growth and development
Criticism of Rostow’s Stages of Economic Growth
- Based on American and European culture
- Assumes that all countries are able to progress through the stages
Dependency Theory
Some people disagree with Rostow that all countries can simply move from stage to stage
Two reasons that countries can get “stuck”
Commodity dependence
Loan (can’t pay back)
World Systems Theory
- core
- semi-periphery
- periphery
World Systems Theory Based on support for dependency theory
will always been a combination of core, semi-periphery, and periphery countries
World Systems Theory Criticisms
- outdated
- Lacks detail about change
Comparative advantage
the ability for a country to produce a good or product more efficiently than another country
Complementarity
the ability for countries who hold comparative advantages in certain areas to link together to satisfy each other’s wants
Neoliberalism
new free trade
Free trade
trade between countries that is not subject to taxes or limitations
Trump’s trade war - pros
some workers in manufacturing that lost their jobs are getting them back
Trump’s trade war - cons (2)
- American consumer has to pay more for goods
- foreign goods → more expensive
- domestic goods → same price (but were expensive already)
- If other countries respond with tariffs, American companies that export will be hurt and forced to cut jobs
More interdependence (2)
- global financial crises
because markets are so interlinked, economic problems in one country impact economies around the world - International monetary fund (IMF)
organization that allows countries experiencing financial problems to borrow money
