POLS 1500 Lecture Notes - Lecture 14: Washington Consensus, Free Trade, Invisible Hand
4 May 2017
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Document Summary
Economic globalization: outsourced labour, transnational corporations, free trade. Global diffusion of capitalism (trade and nance) Process in which international trade increases relative to domestic trade. Increased movement of goods, people, information, and money across borders with decreased time and cost. World is increasingly de ned by single markets rather than by many separate markets. Classical economics: free markets are self regulating, markets will reach and equilibrium if there is no intervention: the invisible hand of the market, flexibility of prices and wages, specialization ef ciency and higher production. Protectionism: economic policy designed to cushion or insulate domestic industries from international competition. Gains in domestic consumption outweighed by losses of exports. They wanted to have tariffs (means of protecting their own economy) Government intervention in the economy to promote economic growth and stability. Goal 1: promote economic and political stability (international monetary fund) and world bank. Kaynesian economic policy: government should play an active role to ensure jobs, growth and equality.
