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91 Cards in this Set
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Dispute Settlement Panel |
panel of the WTO, with impartial members who rule on trade disputes. can authorize sanctions on members who do not comply |
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Fair Trade |
Alternative to free trade, mixing protectionism and free trade to "level the playing field" for domestic producers |
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Foreign Direct Investment (FDI) |
-Investment by foreign individual or institution makes in a foreign company -aim is to increase productivity of enterprise or change its management control (investor gains influence or control) -capital availability is increased for the enterprise -longer-term investment, somewhat stable |
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Foreign Portfolio Investment (FPI) |
-Investment by Individ. or Instit, made in equities in the stock exchange or in the bond of a foreign nation -only requires registration in other country's stock exchange, money enters and leaves more easy -increases capital availability -short term investment, "hot money" |
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GATT |
-1947 -basis of Int.Trade negotiations to reduce trade barriers among its many member nations -Kennedy & Tokyo round= reduced trade barriers for manufactured goods -Uruguay round= create freer trade in services & agricultural goods. |
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GATS (Trade in Services) |
-WTO Agreement in 1995 -rules that companies must follow when delivering services in Insurance, Telecommunications, Banking, & Transport |
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Insourcing |
-Bringing your company back home for domestic jobs -no longer using foreign contractor |
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Intraregional Trade Bloc |
-nations in a particular region remove barriers to trade with other nations in that region -APEC (Asia Pacific Economic Cooperation) is one with 18 Asia Pacific nations |
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Law of Comparative Advantage |
-David Ricardo -produce and export goods in which you can produce at a lower cost than other nations -Trade for the rest |
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Managed Trade System |
Strong political and Social interests who call for trade protection make it hard for for completely free trade. a MTS creates trade policies that most states can agree to |
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Most Favored Nation (MFN) |
When imports from a nation are granted the same degree of preference as those from the most preferred nation |
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National Treatment |
-Principle of GATT, GATS, TRIPS -requires country to treat imported products & services (after going through customs) no less favorably than similar locally produced goods & services |
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Non-tariff Barriers (NTBs) |
-Limiting imports through ways other than tariffs -Licensing, domestic content legislation, labeling, etc. -makes it difficult for foreign goods to be marketed |
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Nondiscrimination |
Principle of WTO, where products of different nations are treated equally with domestic ones |
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Outsourcing |
-Transferring part or all of production to another country. Big L consider this to be part of globalization. -Displaces many workers |
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Reciprocity |
principle of WTO whereby trading partners mutually reduce trade barriers, providing each greater access to foreign markets |
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Regional Trade Agreements (RTAs) |
-Agreement between states in a region to reduce trade barriers between them -easier than Global trade agreements -Fear it may deter global free trade |
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Specialization |
-Adam Smith & David Ricardo -Nations should concentrate on producing what they have a comparative advantage in -Either natural or policy driven |
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Strategic trade policies |
-Efforts from the state to create comparative advantage -done by subsidizing research or industry -(Government getting involved to make your country better in producing something) |
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Super 301 |
US trade policy created in 1970s designed to open foreign markets to US exports |
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Trade-Related Aspects of Intellectual Property rights (TRIPs) |
-International agreement (part of WTO) -Requires minimal standards of protection of copyrights, patents, trademarks, and other intellectual property |
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Washington Consensus |
-viewpoint of US Treasury, World Bank, IMF, WTO -that less developed countries should adopt policies to reduce inflation and fiscal deficits, privatize, deregulate, and create open markets -SAPs |
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Appreciate |
-Rise in value of one currency compared to another -Currencies tend to appreciate when demand for them increases -If currency appreciates too much country's exports decrease |
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Balance of Payments (BoP) |
How much money flows in and out a country annually -this impacts the value of its currency, interests rates, and trade policy, among others -Ideally countries want to earn as much as they spend |
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Capitol Controls |
-Government rules to limit or control inflows and outflows of money and international investment funds. -goal is to maintain orderly international capital movements and prevent financial & foreign exchange instability |
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Depreciate |
-Currency falls relative to another -Can be both benefit and a cost to a nation |
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Currency Exchange Rates |
-What one currency can buy when converted to the currency of another country -Continuously changes |
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Flexible Exchange Rate System |
-Fixed exchange rates= international agreements among states Flexible ER= determined by market forces |
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Hard Currency |
-Currency of known value that is widely accepted in international transactions -US Dollar, Japanese Yen, Euro, Swiss franc |
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Keynesian Compromise |
-Aspect of Bretton Woods -Nations retain ability to intervene in domestic economies but limited on international intervention on economies |
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Managed Float |
System by which currency exchange rates float but are affected by occasional interventions by central bank |
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Mundell Trilemma |
-Robert Mundell -Monetary system in which you can achieve 3 objectives --foreign exchange stability --capital mobility --national economic independence (two will complement each other and the 3rd won't be possible)(states choose which 2 is most important based on history/interests/conditions) |
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Quantitive Easing |
-Engaged by Central Banks such as the US Federal Reserve Bank or Bank of England -Buys government bonds, mortgage securities and more to lower interests rates so private companies invests -Happen 3 times between 2008-2012 |
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Reserve Currency |
-Currency held by a nation's central bank in its foreign exchange reserves -US dollar is most common reserve currency -International transactions and commodities are priced in USD |
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Soft Currency |
Currency with uncertain value that is not generally accepted in international transactions |
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Sovereign Wealth Funds (SWFs) |
Large amounts of capital that have accumulated in the hands of states with large balance-of-payments surplus |
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Speculation |
-An investment in foreign currency based on the belief that the currency will increase in value -allows speculator to earn a return when currency is sold |
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Troubled Asset Relief Program (TARP) |
-$700 billion recovery effort by 43 Bush to deal with crisis of 2008 -Obama later put another $250 billion into big banks in hopes to get them to lend more |
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Conditionality |
-Controversial policy of IMF that ties short-term loans to certain conditions designed to improve account current account balances -Making loans subject to domestic and economic reform that promotes economic liberal policies and values |
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Credit Default Swaps |
-Schemes in the US where investors could buy insurance against the possibility that big banks would default on repaying their loans -Investors would bet on banks failing and not failing -Later banks couldn't pay CDSs which contributed to Financial Crisis |
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Crony Capitlaism |
-Term applied to close business-government relations in Asian and other countries, especially when these links foster corruption. -Often offered as explanation for financial crisis |
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Currency Crisis |
-Conditions that occur when a nation's currency suffers a drop in value -Some say this is caused by capitalism |
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Shadow Banking System |
Financial Intermediaries (money market mutual funds, investment banks, hedge funds) that channel flows of money between creditors and borrowers in ways that are largely unregulated by government |
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Speculative Attack |
Situation where the demand for a currency quickly deteriorates, causing speculators to sell of large quantities of a currency in the hope that they will buy it back later at a low price |
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Structural Adjustment Policies |
-IMF creates these through loans -Ways of influencing struggling economies to change policies in return for loans |
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Subprime Mortgage Loans |
-Home loans by banks in US to customers who did not have to meet the higher standards for loans as they did before the mid-1990s -May have contributed to Financial Crisis by giving loans to people who could not repay |
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Volcker Rule |
-Paul Volcker -provision of 2010 Dodd-Frank by prohibiting banks with federally insured deposits from engaging proprietary trading --making risky investments with their own money -designed to combat another Financial Crisis |
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Asymmetric Information |
-Problem that especially exists in rural credit markets -Lender doesn't know who is trustworthy and who is not, but the borrow knows -Results in high interest rates from lenders, and discourages borrowers |
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Export-Oriented Growth |
-A tactic for economic growth that focuses on bolstering exports and integration into global markets -Popular amongst many emerging market China -(Contrasts with Import-substituting industrialization) |
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Grameen Bank |
-Microcredit Bank founded in Bangladesh by Mohammad Yunus (1976) -Method of helping poor women in poor countries create small business enterprises. |
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Heavily indebted poor countries (HIPCs) |
-41 of the world's poorest countries, mostly in Africa -These countries suffer from high poverty and high incidences in HIV/AIDS |
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HIPC Initiative |
An effort beginning in the late 1990s to cancel the debt of the most heavily indebted poor countries |
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Import-substituting industrialization |
-An economic development tactic to encourage domestic industrialization by restricting imports of industrial products -Contrasts to Export-Oriented growth |
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Informal Economy |
-The part of an economy that is unregulated and usually does not pay taxes. -In a less developed country, most street vendors would be informal |
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Microcredit |
-Practice of providing very small loans to groups of people (usually women) in less developed countries -Praised for putting money into the hands of those who need it, thus encouraging private-sector development |
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Odious Debt |
Foreign Liabilities incurred by a former corrupt regime that leave the new government owing tremendous sums of money to banks and investors, stifling development efforts |
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United Nations Conference on Trade and Development (UNCTAD) |
-Created in 1964 - designed to check the influence of the Organization of Economic Cooperation and Development (OECD) which reflects the political and economic interests of the developed nations |
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Cap and Trade |
-Controversial policy put forward by some states in Kyoto Accord -allows countries to buy & sell or swap emission production quotas with one another -After reaching your output limit, you can buy or trade for more -Market solution to an environmental problem |
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Carbon Sinks |
-Typically a forest or large bodies of water that absorb much carbon dioxide -Some countries plant forests as an acceptable method of offsetting carbon emissions |
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Chlorofluorocarbons (CFCs) |
(Chlorine, Fluorine, Carbon) Deplete the ozone layer around the earth and contribute to global warming |
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Climate Change |
increase in earth's temperature resulting from greenhouse gases |
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Collective goods |
-Goods available to all members of a society -raises question of who should pay for these goods -no one pays for them and "free rides" |
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Demographic Transition |
The point at with population growth rates decrease as birth rates decrease & per-capita income levels rise |
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Earth Summit |
-1992 meeting in Rio -focused on ways to preserve economic development while preserving the environment -set in motions what would later become Kyoto protocol |
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Emissions Credit |
Implementation mechanism for the Kyoto Protocol which allows countries to buy and sell production quotas |
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Kyoto Protocol |
-Procedures & Norms agreed to in Kyoto, Japan(1997) -established carbon emission standard goals for all states -Agreed upon in a set period of time |
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Montreal Protocol |
International treaty now signed by most countries requiring dramatic reductions in ozone depleting emissions |
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Ozone Depletion |
-1985 a hole in the ozone over Antartica was discovered -Chlorofluorocarbons |
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Sustainable Development |
-economic development consistent with the goal of non-degradation of the environment -controversial because it requires tradeoffs that may be unacceptable |
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Tragedy of the Commons |
-Situation in which Human Nature, Rationality, and Political Freedoms drive individuals to overuse communal (Easter Island) |
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United Nations Environment Program (UNEP) |
-UN agency created to aid in the drafting of treaties, provide a forum, and create databases for scientific assessments on the environment -Designed treaties such as Kyoto Protocol |
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United Nations Framework Convention on Climate Change (UNFCCC) |
Environmental treaty produced at Earth Summit and later modified resulting in Kyoto Protocol, |
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Cartel |
A group of firms or nations that cooperate with one another to control production and price of a commodity of a particular product |
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Hydraulic fracturing |
High pressurized fluids injected into underground rock to fracture and release natural gas |
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National oil companies (NOCs) |
Large state owned oil companies that control a majority of the world's oil and natural gas |
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OPEC |
Organization of nations formed in 1960 to advance the interests of third world oil exporters |
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Peak oil |
The controversial idea that the world's production of oil will reach a maximum point, after which it will gradually run out |
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Petrodollar recycling |
Since 1973, the system whereby oil exporters recirculate their oil revenues through the global financial system to provide loans to oil purchasers, fund imports by oil producers, and purchase foreign assts |
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Resource curse |
Countries that are wealthy in natural resources remain underdeveloped because of government mismanagement and corruption |
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Sequestration |
Method of storing carbon underground which, if perfected, could be helpful in reducing carbon released in atmosphere |
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Spot markets |
Markets where oil is sold outside OPECs established pricing structure. eg Kuwait |
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Appropriability theory |
A theory that transnational corps engage in fdi in order to keep firm specific advantages from being appropriated or acquired by competitors |
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Branch factory syndrome |
A syndrome where the headquarters of many major transnational corporations fear losing information to a rival firm if it is transferred to subsidiaries of the corporation in another country |
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Corporate social responsibility |
Describes efforts of TNC and domestic businesses o behave in ways that demonstrated respect for communities an nature |
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FDI |
Investments made by a company in production, distribution, or sales facilities in another country |
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Global Commodity Chains |
Networks of firms that produce, distribute, and market various products |
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Globally integrate enterprise |
Increasingly , TNCs do not in fact own most of the elements of their foreign operations. With improved informative tech, some TNCs can easily outsource vital functions to foreign owned forms |
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Multinational corporation |
AN international business firm that engages in production, distribution, and marketing activities that cross national boundaries. |
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Product cycle theory |
Describes production and trade patterns stemming from productive innovation and technological diffusion |
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Transfer Pricing |
A mechanism used by transnational corporations to shift their accounting measures between subsidiaries in other countries so as to avoid taxes
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Transnational corporations |
A large business that competes in regional or global markets and whose business environment therefore extends beyond any given nation-state. Keys: high level of fdi. |
