INTST101 Chapter Notes - Chapter 3: Lord John, Financial Transaction, United States Dollar

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ECONOMIC GLOBALIZATION
What is economic globalization in your view?
Advancement of international trade > rise of transcontinental sharing of technology, combined with free-market
ideology allow goods, services, and capital efficient mobility
> Western countries take advantage of cheap labour and resources in the Global South/underdeveloped nations
through policies often supported by Southern elites > use international financial institutions and regional trade
agreements to compel poor countries to integrate by reducing tariffs, cheapening currency, privatizing enterprises,
and reducing environmental and labour standards
Privatization: means the transfer of assets from the public (government) sector to the private sector
Liberalization: relaxation of government restrictions, usually in such areas of social, political and
economic policy
> Economic liberalization: the opening up to the rest of the world with regards to trade, regulations,
taxation; all developed countries have already gone through liberalization process developing and emerging
countries have yet; includes: reducing/removing tarrifs, tax on foreign investment, trade regulations
Deregulation: reduction or elimination of government power in a particular industry, usually enacted to
create more competition within the industry
> EX: in the US, there are no longer ceilings on interest rates and deposits, and banks can today operate
across state lines and globally > this deregulation makes banking industry more competitive, benefiting both
the consumer and the organizations
Austerity: when gov. spending cuts and higher taxes occur during recession or period of very weak
economic growth > implies that spending cuts and tax increases are likely to have an adverse impact on
demand and economic growth
Structural Adjustment Programs (SAPs): are economic policies for developing countries enforced by
World Bank and IMF for provision of loans
- supposed to allow the economies of the developing countries to become more market
oriented > concentrate more on trade and production so it can boost their economy > leads
to privatization and deregulation and removal of trade barriers
Neo: prefix = new
Liberalism: economic liberalism ideological belief in organizing economy on individualist > the greatest
possible number of economic decisions are made by individuals and not by collective institutions or
organizations
Foreign Direct Investment (FDI) : an investment made by a company or entity based in one country, into a
company or entity based in another country
Dispute Settlement Body of the WTO: makes decisions on trade disputes between governments that are
adjudicated by the Organization
Emerging Economies (The BRICS / N-11): economies with low to middle per capita income;
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