Political Econ - Exam 3

Front 1

The Atlantic Charter

Back 1

- drawn up by Roosevelt and Winston Churchhill
- American effort to ensure that the UK signed on to the liberal democratic war aims
- Reaffirmed free trade, equal access for countries to the raw materials of the world, and international collaboration
- advance labor standards, employment security, and social welfare

Front 2

Bretton Woods Agreements

Back 2

- Allowed political leaders to envisage a postwar economic order in which multiple and otherwise competing political objectives could be combined.
- They served as a basis on which to build broader coalitions around a relatively open and managed order.
- Middle path that generated support from both the conservative free traders and the new enthusiasts.
- Led to the formation of several important institutions that facilitate the openness of stability in the world economy

Front 3

American Grand Strategy - Postwar

Back 3

Free trade = peace

Front 4

European Economic Integration

Back 4

- US supported it by restoring European growth and living standards

Front 5

IMF

Back 5

- supervise the operation of the monetary system and provide short-term financing to counties facing balance of payment difficulties
- 183 members
- contributions from member countries (depends on economic size)

Front 6

World Bank

Back 6

- 183 members
- supports long-term investment projects in developing countries
- borrowing on world capital markets and contributions from donor countries
- Goal = poverty reduction and facilitation of sustainable economic development

Front 7

World Trade Organization

Back 7

- 142 members
- promotion of an open world trading system through reduction of trade barriers
- "freer and fairer trade"

Front 8

General Agreement on Tariffs and Trade

Back 8

multilateral agreement regulating international trade. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis."

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Economic Incentive

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- Promised or actual extension by an initiator state of an economic benefit to a target in exchange for compliance by the target with a political demand of the initiator

Front 10

Economic Sanction

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- threatened or actual interruption of economic ties by an initiator state against a target state for the purpose of forcing the target to meet a specific political demand of the initiator.

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Blockade

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- Type of economic sanction
- seeking to stop all commerce between the target and the outside world

Front 12

Embargo

Back 12

- Type of sanction
- initiator seeks to prohibit some or all of its' own exports to the target but does not interfere with financial contacts between its residents and the target and does not interfere with economic ties between the target and third countries

Front 13

Boycott

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- Prohibiting some or all imports from the target.

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Most-Favored-Nation Status

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- Used under the WTO where member states extend to one another unconditionally the same treatment with regard to imports that they extend to the nation that is their "most-favored" partner, thus greatly facilitating access to their home markets.
- Major incentive; can also be used to sanction them as well by not renewing the MFN

Front 15

Currency Attacks

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- Attempt to weaken its exchange rate.
- Example; selling British pounds

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Freeze on Financial Assets

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- Denial to residents of the target country of access to financial assets they hold in the initiating country

Front 17

Unilateral Sanctions

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- imposed by an initiator against a target without the initiatitor's asking other countries to join it in the sanctions

Front 18

Multilateral Sanctions

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- countries working together to employ sanctions against a target

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Primary Sanctions

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- initiator seeks directly to interrupt bilateral economic ties between itself and the target, and thereby directly to impose costs on the target.

Front 20

Secondary Sanctions

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- initiator seeks to impose economic penalties against third countries as a way of forcing them to curtail their economic transactions

Front 21

Sanctions Fatigue

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- citizens of the initiators country may come to believe that the sanctions are failing, are hurting innocent civilians, and out to be abandoned.

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GDP

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Presents information on ratios of merchandise exports

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Multinational Enterprises

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- Undertaken by FDI which are firms that have two main characteristics; first they have significant operations not just in the countries in which they are headquartered, but also in other countries. Second, multinational enterprises seek the formulation and implementation of global strategies

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FDI

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- has become a key source of capital formation in major groups of countries

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Value added chains

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- Firms increasingly draw on both in-house and independent suppliers on a worldwide basis for manufactured inputs and components, tying more closely together the national manufacturing systems of different countries.

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Capital Market Integrations

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- growth in capital-market integration with respect to foreign-exchange transactions from the viewpoint of long-term capital market integration, cross-national movement of foreign direct investment

Front 27

Golden Straitjacket

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In order to enjoy the benefits of globalization, governments may believe that they are constrained in their freedom to use fiscal or monetary or social policy to improve the problems faced by unskilled workers.

Front 28

Race to the Bottom

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Advanced countries abandon commitments to the compromise of embedded liberalism.

Front 29

International Regimes

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Multinational institutions

Front 30

Nontariff Barriers

Back 30

Examples; health standards, subsidies, product regulation are more difficult to identify and eliminate.

Front 31

G7 or G8

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- Leading economic powers in control
- Central governance mechanism for the world political economy
- consult on monetary and fiscal policies

Front 32

Rule-based policy coordination

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ongoing rules of economic relations. This coordination is autonomic. Governments do not need to make continuous choices about whether to cooperate with another country; the rules ensure that this happens.
- Fixed-exchange regime is a rule-based logic

Front 33

Gold Standard

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- Each country's national currency was pegged to the price of gold, which itself is a fixed value
- Traders could buy and sell currencies and capital could move between national economies at predictable exchange rates.
- Monetary relations would be fixed.

Front 34

Discretionary Policy Coordination

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- one-at-a-time agreements.
- states offer to make policy adjustments or concessions in exchange for policy adjustments of concessions made by other states
- Exercised in G7

Front 35

Tobin Tax

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a proposed tax on international financial transactions, especially speculative currency exchange transactions.

Front 36

Zakat

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a tax, comprising percentages of personal income of every kind, levied as almsgiving for the relief of the poor: the third of the Pillars of Islam.

Front 37

Riba

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- The pre-Islamic Arabian practice of doubling the debt of a borrower unable to make restitution on schedule, including both the principal and the accumulated interest.
- block socially harmful financial practices

Front 38

Islamic Banking

Back 38

that the stated principles of Islamic banking are precisely those of venture capitalism. Like venture financiers, Islamic banks are supposed to partici- pate in the risks of the firms they finance.