Test #3 Review

Test #3 Review - POLI 150 Test #3 Study Guide Hegemons Role...

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POLI 150 – Test #3 Study Guide Hegemon’s Role o Hegemonic stability hypothesis Open global economy when a Hegemon exists Closed global economy when no hegemon is present o Provide the infrastructure (Global public goods) Property Rights Secure assets located in foreign lands Contract Enforcement Ensure payment for goods across national jurisdictions Secure Trade Routes Necessary to enable long distance trade o Act as a shock absorber Lend money to deficit countries in times of crisis Absorb exports of small countries Provide engine of global growth Open global economy equates to robust growth o Average standard of living rises faster in periods of globalization than in periods of localization Lessons US learned from interwar period o Prosperity and peace depend upon stable international economy o Stable international economy requires American leadership o US must accept hegemonic role in post WWII world American hegemony in the postwar period o Reduce rather than raise tariffs o Foreign aid rather than insist on debt payment o Design international economic organizations to promote open and stable global economy The General Agreement on Tariffs and Trade (GATT) Bretton Woods international financial system Fixed exchange rates, convertible currencies, and international financial flows International financial institutions o IMF o World Bank The WTO and GATT o Four core principles Market-based liberalism Non-discrimination Reciprocity and progressive tariff reductions Domestic safeguards IMF o Enforces budget adjustment
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o Provides finance when no one else will o Provides a financial cushion o IMF doesn’t continually loan forever Loans contingent upon budget reform Forces groups to overcome budget strategy disagreements o Sort of a safeguard o Hegemon creates order This is intended to make sure that the global economy doesn’t falter o Makes other countries more comfortable with the status quo o Incentive for hegemon to finance because it maintains this order Hegemon benefits most from order o Not real popular internationally Countries that get funding from it are forced to make themselves poorer in the short run Forces them to cut government spending and maybe increase taxes
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This note was uploaded on 11/27/2011 for the course POLI 150 taught by Professor Mosley during the Fall '08 term at UNC.

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Test #3 Review - POLI 150 Test #3 Study Guide Hegemons Role...

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