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29 Cards in this Set
- Front
- Back
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Four main models of trade
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(1) Heckscher-Ohlin (2) Specific factors: Samuelson-Jones and RV (3) Neo-Ricardian (4) Economies of scale |
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Two empirical problems with HO? |
1) Equalization of returns 2) Capital and high-skilled labor flows to developing countries |
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HO vs. RV? |
Class coalitions vs. Sectoral coalitions |
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RV vs. SJ? |
RV: Necessarily sectoral coalitions SJ: Three factors (capital, skilled, unskilled) Skilled labor mobile -> May win or lose from trade -> Consume which goods |
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Flagship of neo-Ricardian? |
Davis-Weinstein (2005)
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Why is DW neo-Ricardian? |
Assume different technologies and TFP |
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DW vs. HO? (Assumptions) |
HO: Identical production functions DW: The US may have higher returns to ALL factors |
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DW vs. HO? (Implications)
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(1) Trade no longer equalizes returns (2) AS A RESULT, migration keeps going (3) Migration may harm ALL sector in the receiving country |
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Restricted Income Tax Schedule vs. Unrestricted |
(1) Constant lump sum payment to everyone (2) Linear or quadratic tax scheme |
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Why is Meltzer-Richard (1981) restricted? |
c = y(1-t) + r |
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Four classes of redistribution models |
1. Restricted 2. Unrestricted 3. Heterogenous groups 4. Imperfect Information |
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What is the apparent inherent contradiction between democracy and capitalism? |
One produces inequality, the other equalizes. Why don't the poor soak the rich? Why don't the rich shun investment or run? |
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Precursor: Why don't the poor soak the rich? |
Przeworski and Wallerstein (1982): Valley of transition Attempts at redistribution met with radical disinvestment + violence -> Class compromise |
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Why the variance in redistribution across capitalist systems? Two explanations |
1. Median voter model: Meltzer and RIchard (1981): Shape of income distribution and median voter 2. Role of political power (labor): Power resource theory and neo-corporatist theory |
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Problem with the Meltzer-Richard explanation?
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Implication: Unequal societies redistribute more -> Rejected soundly by data |
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Problems with the political power explanation?
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1. Role of Employers? 2. Why class and not sectors? |
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Why don't the poor soak the rich? Three explanations |
1. Partisanship (if left party simultaneously pro-redistribution and pre-tax equality) 2. Multidimensional politics 3. Institutions |
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Partisanship necessarily violates median voter theorem. How can this be possible?
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1. Probabilistic voting: Wittman (1973) 2. Core constituents and activists: Trade policy for money and effort (Aldrich 1983) |
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The Institutions explanation? |
1. Majoritarian vs. PR 2. Federalism: Capital mobile -> Reduce tax (Brennan and Buchanan 1980), also Weingast (1995)'s market-preserving federalism Pierson (1995)'s race to the bottom 3. Varieties of Capitalism (Hall and Soskice 2001) |
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How does Varieties of capitalism explain the coexistence of the welfare state and capitalism? |
1. Institutional complimentarity 2. Two systems: LMEs and CMEs Social welfare net encourages workers to acquire specific skills -> Help capitalism |
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Three ways in which inequality affect politics? |
1. Affect redistribution (Meltzer-Richard 1981) 2. May reduce redistribution (the rich have more resources) 3. May affect institutions themselves (democracy?) |
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Explaining American exceptionalism in terms of inequality and redistribution? |
1. Median voter theorem does not help 2. Ethnic heterogeneity 3. Political institutions (Majoritarian, Senate, SC) 4. Lack of war? 5. Belief of social mobility |
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Two questions of IPE
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1. When do states open up? (Globalization ~ Politics) 2. How does opening up affect actors? (Politics ~ Globalization) |
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History of IPE |
1. Big in the 18th century
2. Then devolved into marginalist economics and political science 3. Popular again in the 1960-1970 |
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Two real-world developments that awakened IPE? |
1. Bretton Woods -> Interdependence 2. Challenges to this system: Gold convertibility OPEC and New International Economic Order American protectionism: VERs |
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Early currents of IPE: 1. Dependency Theory |
Poor countries hindered by a system biased against them |
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Why did the Dependency Theory wane in the 1980s?
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1. No logically unified and consistent theory 2. Empirically falsified by the Asians |
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Early currents of IPE: 2. HST |
Single hegemonic state necessary for openness |
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History of HST |
1. Strong in the 60s 2. American hegemony declined in 70-80: Expected protectionism and less openness -> Partially true 3. But then the trend stopped -> Interests waned 4. 90s: American hegemonic again but HST forgotten |
