[POL208Y1] - Final Exam Guide - Everything you need to know! (22 pages long)
29 Mar 2017
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Economic theory: free trade (absolute advantage) benefits all (smith); comparative advantage (ricardo) Why? afraid. trade: domestically: stopler/ samuelson, internationally: terms of trade. Hegemons are too big to fail not sensitive or vulnerable so they(cid:495)re not. A hegemon enjoys comparative advantage would benefit most from free. A hegemon solves the prisoner(cid:495)s dilemma by institutionalizing freer trade . In time od crisis a hegemon can prevent (cid:498)beggar thy neighbor(cid:499) policies willing to pay the cost of preserving it thus paying for (cid:494)collective goods(cid:495): Since the hemeon benefits from the stability of the current system it will be enforcing the rules and preventing defection policing, enforcing rules. The most open countries are small countries e. g. ireland then switzerland. Elegant and parsimonious; however the evidence is inconclusive; static; how does it work in practice; the role of institutions. The great depression: deflation and laissez-faire didn(cid:495)t work more unemployment. Government response: protectionism made things worse. Rise of extremist political movement war.
