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14 Cards in this Set

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By___Britain accounted for ___% of European Industrial Production, ___ % of world industrial production, and was home to___% of newer technology industries.
a. 37
b. 20
c. 80
Britain abolished its Corn Laws in the year____.
1847
Although Britain had removed most of its industrial trade restrictions by the 1830s, it continued to impose barriers on agricultural trade, however agricultural elites were increasingly outpaced by economic elites affiliated with the industrial sector. This abolition of the Corn Laws allowed Britain to convince other countries to lower their trade barriers for British industrial goods. This decisively post-mercantilist stance openly championed Ricardo's concept of comparative advantage.
The __________ Treaty, between Britain and France, resulted in a network of commercial treaties lowering tariff barriers across Europe.
The Cobden-Chevalier Treaty, named after its British and French originators, was a free trade treaty that reduced French duties on most British manufactured goods to levels not above 30% and reduced British duties on French wines and brandy. In consequence the value of British exports to France more than doubled in the 1860s and the importation of French wines into Britain also doubled. France ended the treaty in 1892 in favour of the Méline tariff.
Major European states abandoned free trade during the ______ and after ____ even Britain turned increasingly to its colonial Markets.
1870s and 1880s....1890
The primary cause for Britain's backing away from free trade was ...
its declining export competitiveness, as British industrial goods face growing competition from American and German manufactures. goods.
On the whole, Britain's share of worlds trade fell from ___% in 1870 to ___% in 1913, while the US share rose from ___% to ___% and Germany's from ___% to ___%.
a. 24...14.1
b.8.8...11.1
c.9.7...12.2
The US and Germany both relied heavily on high tariff walls, to protect their internal markets from cheaper British imports, to build up their infant industries.
By ____, at the eve of world war I, the US had become the worlds largest industrial power, accounting for some ____% of world industrial output.
1913...32

At the same time however, Britain continued to dominate international finance until World War I. London was the world's financial center and in 1913 the British still accounted for around ___% of world investment.
43
________marks a decisive point in the shift from British to US Hegemony...
World War I...as the War left Britain heavily in debt and allowed the US to emerge as the World's preeminent creditor nation. These turn of events saw the world's financial center shift from London to New York as well.
What is Purchasing Power Parity?
PPP is a measure of long-term equilibrium exchange rates based on relative price levels of two countries. The concept is founded on the law of one price, the idea that in absence of transaction costs and official barriers to trade, identical goods will have the same price in different markets when the prices are expressed in terms of one currency.
the Balassa-Samuelson effect
The Balassa–Samuelson effect, also known as Harrod–Balassa–Samuelson effect (Kravis and Lipsey 1983), the Ricardo–Viner–Harrod–Balassa–Samuelson–Penn–Bhagwati effect (Samuelson 1994, p. 201), productivity biased purchasing power parity (PPP) (Officer 1976) and the rule of five eights (David 1972) is either of two related things:

-The observation that consumer price levels in richer countries are systematically higher than in poorer ones (the "Penn effect").

-An economic model predicting the above, based on the assumption that productivity or productivity growth-rates vary more by country in the traded goods' sectors than in other sectors (the Balassa–Samuelson hypothesis).
Dutch Disease
Dutch disease is a concept that purportedly explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector. The claimed mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation's other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment".
The term was coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of a large natural gas field in 1959.
Hegemonic Stability Theory
Theory that maintains the international system is more likely to remain stable when a single nation-state is the dominant world power, or hegemon.

When a hegemon exercises leadership, either through diplomacy, coercion, or persuasion, it is actually deploying its "preponderance of power." This is called hegemony, which refers to a state's ability to "single-handedly dominate the rules and arrangements ...[of] international political and economic relations."
Research on hegemony can be divided into two schools of thought: the realist school and the systemic school. Each school can be further sub-divided. Two dominant theories have emerged from each school. What Robert Keohane first called the "theory of hegemonic stability," joins A. F. K. Organski's Power Transition Theory as the two dominant approaches to the realist school of thought. Long Cycle Theory, espoused by George Modelski, and World Systems Theory, espoused by Immanuel Wallerstein, have emerged as the two dominant approaches to the systemic school of thought.
5 periods of hegemonic rule

-Portugal 1494 to 1580 (end of Italian Wars to Spanish invasion of Portugal) Based on Portugal's dominance in navigation Hegemonic pretender: Spain

-Holland 1580 to 1688 (1579 Treaty of Utrecht marks the foundation of the Dutch Republic to William of Orange's arrival in England) Based on Dutch control of credit and money Hegemonic pretender: England

-Britain 1688 to 1792 (Glorious Revolution to Napoleonic Wars) Based on British textiles and command of the High Seas Hegemonic pretender: France

-Britain 1815 to 1914 (Congress of Vienna to World War I) Based on British industrial supremacy and railroads Hegemonic pretender: Germany

-United States 1945 to 1971 Based on Petroleum and the Internal Combustion Engine Hegemonic pretender: the USSR
The Liberal Perspective has dominated in IPE because...
...
Declinists vs. Renewalists
Declinists maintain that US hegemony has been or is in decline. Most regard hegemony as inherently stable, and predict that the hegemon will overextend itself in military and economic terms, and as "freeriders" gain more than the hegemon from economic openness, that dynamic new economies will arise to challenge the hegemon's predominant position.
In Contrast renwalists maintain that although US economic power has declined (as it was bound to in the context of post-war reconstruction in Europe and Japan) US economic power remains unmatched, particularly because when one considers the continuing legacy structural or soft power.