PSCI 152 Study Guide - Spring 2018, Comprehensive Midterm Notes - World Trade Organization, Protectionism, Labour Economics
12 Oct 2018
School
Department
Course
Professor
PSCI 152
MIDTERM EXAM
STUDY GUIDE
Fall 2018
PSCI 152- Lecture Notes
Lecture 1
Waves of Globalization
Good Period: 1814-1915
Bad Period: 1914-1945 (because countries became more insular during and between the world
wars
Good Period: 1945- present (sort of)
Wave 1(19th C)
Before this time, trade would only be profitable if the good had a high profit margin and was light.
Shipping costs were a prohibitive expense
Technology- Lowers shipping expenses
Steam engine (railroad and steam ships)
Telegraph
Politics- countries start loosening limitations on trade. Need more food to feed the urbanizing
population and have fewer farmers
Britain leads opening of system
Opens market to grain (1840
Gravity theory of trade- more likely to trade with countries close to you
Collapse of the Global System
Great Depression
Protectionism dominates
Us Imposes Smoot-Hawley Tariffs
Lessons Learned (by the US)
WWII partly caused by a broken global economy
US alone can establish global economy
US isolationism focuses on protecting its domestic industries where as the rest of the
world wants to establish rule to improve international trade
Wave 2
Rebuilding the global economic system
Bretton Woods- negotiations in New Hampshire to basically determine the "new World
Order"
IMF(International Monetary Fund) and World Bank
Similar to 19th c global economy
US proposes the ITO
Prolonged Negotiations
Tariff reductions (taxes on foreign goods)
23 countries sign the GATT General Agreement on Tariffs and Trade
US Congress refuses to support ITO
Because of this No other countries ratify the GATT
Fear of loss of sovereignty by an overarching organization
GATT becomes framework for trade
GATT is legally binding
Subjects of IPE
International Trade System
World Trade Organization
General Agreements on Tariffs and Trade (GATT)
Regional Trade Agreements
find more resources at oneclass.com
find more resources at oneclass.com
International Monetary System
Facilitates Intl exchange
Fixed Floating exchange rates
The Gold standard (1870s-1914)
International Monetary Fund
Multinational Corporations
Firms that control production facilities in at least 2 countries
1/4 of world production
1/3 of world trade
Economic Development
Deliberate economic development strategies
Welfare Consequences of Development
How international engagement impacts development?
Traditional Schools of IPE
Mercantilist 17-18c
National Wealth and state power are connected
Power comes from wealth
Trade is a tool to acquire wealth
Trade surplus to accumulate wealth
Value specific types of business
Manufacturing is Favored
Modern Mercantilism
Economic Strength is critical to national power
Encourage exports, discourage imports
Prefer high tech manufacturing
Liberal 18th
Separate economics and Politics
Econ is about individuals, not state power
State gain from all trade
Regardless of trade balance
Best off producing what they are best at
Use relative advantage, then trade
Market is best for social welfare
Individual should make their own choices
In free exchanges, all parties benefit from exchange
State must establish property Rights
Judicial system enforces ownership and contracts
State can (should) intervene where market fails
Market fails to allocate resources to desirable areas
I.E. The military, social safety nets
Marxist
Capitalism
Private ownership of means of production
Tends to from a small wealthy class ad peasants
Wage labor
Karl Marx
Value of goods based on labor used to make them
Capitalists do not pay for full value
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Bad period: 1914-1945 (because countries became more insular during and between the world wars. Before this time, trade would only be profitable if the good had a high profit margin and was light. Need more food to feed the urbanizing population and have fewer farmers. Gravity theory of trade- more likely to trade with countries close to you. Wwii partly caused by a broken global economy. Us isolationism focuses on protecting its domestic industries where as the rest of the world wants to establish rule to improve international trade. Bretton woods- negotiations in new hampshire to basically determine the "new world. 23 countries sign the gatt general agreement on tariffs and trade. Because of this no other countries ratify the gatt. Fear of loss of sovereignty by an overarching organization. Firms that control production facilities in at least 2 countries. Best off producing what they are best at. In free exchanges, all parties benefit from exchange.
