PS 0500 Lecture Notes - Heavily Indebted Poor Countries, International Monetary Fund, Debt Crisis
Document Summary
Examples: lighthouses, clean air, national defense, public radio: in international relations: free trade, monetary stability. Regulate activities so they are contributing to positive collective outcomes. A collective good: lowers price for everyone, comparative advantage (economics) Makes sure that each state is producing to their relative advantage. Efficient allocation of resources and prices go down: example: china- the price we pay in u. s. is cheap bc china produces and we import. But states have political incentives to put up trade barriers: tarriffs- taxes on imports. Retaliation in response to unfair trade practices: non-tariff barriers- e. g. , quotas on imports, subsidies to domestic industries. Subsidise the steel industry- that industry will be more competitive and sell cheaper: currency manipulation. Eu import barriers major point of contention with developing countries. Contributed to collapse of wto trade talks: poor countries fight to lower trade barriers so they can sell their agricultural products in the global market.
