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International Political Economy_2

International Political Economy_2 - Term Definition...

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Term: Distributional Consequences Definition: how income is distributed between groups within countries and between nations in the international system. EG. Tariffs on imported steel raise the prices in America, which redistributes income from steel consumers to producers and income from foreign steel producers to American producers. Term: Evaluative Studies Definition: assessing policy outcomes, making judgments about them, and proposing alternatives when the judgment made about a particular policy is a negative one. Term: Explanatory Studies Definition: oriented toward explaining the foreign economic policy choices that governments make. EG. Why one gov chooses to lower tariffs + open economy to trade, while another protects market from imports? Term: Ideas Definition: mental models that provide a coherent set of beliefs about cause-and-effect relationships.
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Term: Interests Definition: the goals or policy objectives that individuals, firms, labor unions, and governments use foreign policy to achieve. Term: Liberalism Definition: 1. Purpose of economic activity was to enrich individuals, not to enhance state power. 2. Countries gain from trade regardless of whether the balance of trade is positive or negative. 3. Countries are wealthier by making products with low cost and trading them for goods that they can produce with high costs. *governments should not influence country's trade balance or shape goods. *resources should be allocated through voluntary MARKET-BASED transactions between individuals, and NOT politics. *governments should resolve market failures *"Is there some alternative allocation of resources that would enable the society to improve its standard of living?" Term: Market Failures Definition: instances where voluntary market-based transactions between individuals fail to allocate resources to socially desirable activities
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Term: Marxism Definition: capitalism would lead to revolution that would remove private property. 1. capital increasingly concentrated in the hands of a small, wealthy elite. 2. As profits shrink, capitalists are forced to reduce wages on impoverished masses. 3. capitalism is plagued by imbalance between ability to produce goods and purchase goods. *decisions about what to produce are made by the few firms that control the necessary investment capital. *the state enacts policies that reinforce capitalism. *LARGE CORPORATIONS determine how resources are used. Term: Material Interests Definition: people have material interests that arise from their position in the global economy. EG. American steelworkers favor tariffs on imports because they keep job. Steel mill employees also favor cause your steel is higher priced. However, autoworkers do not favor; higher steel price means higher costs to produce car.
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Term: Mercantilism Definition: 1. Economic strength is a critical component of national power.
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