The Global Economy Flashcards
A large part of contemporary global economy can be traced back to the _______________ when delegates from different states, including the Philippines, gathered to plan for the global economy post-World War II
Bretton Woods Conference
Purpose of the Bretton Woods Conference, or the International Monetary and Financial Conference:
- To set up a stable monetary system
- To promote free trade
- To support economic recovery from war
It eventually led to the creation of three multilateral institutions:
- IMF
- World Bank
- GATT
promotes international financial stability and monetary cooperation
International Monetary Fund
facilitates international trade, promotes employment and sustainable economic growth, and helps to reduce global poverty
International Monetary Fund
Seeks to end extreme poverty and promote shared development in a sustainable way
World Bank
Engages the development community with real-world statistics, and supports countries’ poverty reduction strategies
World Bank
Delegates during the Bretton Woods Conference initially planned to design a postwar trading system that would parallel the international monetary system facilitated by the IMF, but this did
not materialize
General Agreement on Tariffs and Trade
market-oriented
liberal policies
restrict international trade
protectionist policies
The Uruguay Round, a new round of trade negotiations, is launched; culminates in 1994 Treaty that establishes the
World Trade Organization
– Administers WTO trade agreements
– Serves as forum for trade negotiations
– Handles trade disputes
– Monitors national trade policies
– Provides technical assistance and training for developing
countries
– Fosters cooperation with other international organizations
World Trade Organization
International trade has increased dramatically due to elimination and/or reduction of restrictions such as
tariffs
applies also to trade in services, investment measures, property rights
World Trade Organization
has faster and more automatic dispute settlement mechanism less prone to blockages compared to the old GATT system
World Trade Organization
are organizations that own or control overseas companies or production or service facilities in one or more countries other than the home country; also called
transnational companies (TNCs)
Multinational Corporations (MNCs)
entry into a business enterprise in one
country by an entity based in another country
Foreign direct investment
investment on securities (as stocks and
bonds) in a host country
Portfolio investment
Two theories provide an explanation on the causes of contemporary economic globalization:
- Hegemonic stability theory
- Neo-liberal institutionalism
– Argues that today’s economic globalization could be largely traced back to US-led postwar efforts.
– Maintains that the US had a preponderance of power to shape a
liberal global economy, and it had the willingness to act.
– Is based on the idea that powerful states, that is hegemons, shape international economic order, in the same manner that
the UK did during the Pax Britannica.
Hegemonic stability theory
– Underscores the essential role of liberal international
institutions.
– Contends that international institutions, such as the IMF, World
Bank, and the GATT, have an independent impact on the global
economy
– Holds that the governing arrangements these institutions provide
create regularity in actors’ behavior and expectations.
Neo-liberal institutionalism
