Poli 260 - Week 8-9 (Lecture)

Poli 260 - Week 8-9 (Lecture) - Poli 260 Week 8 Origins of...

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Poli 260 Week 8: Origins of the Global Economy MONEY!!! - Need to figure out what the hell is going on between Germans, Greek sovereign debt, deadbeats buying houses Chinese surpluses, synthetic Collateralized Debt Obligation… - Puzzle of globalization - Basics of political economy: o GDP (what it is, how it is measured) o Basics about economic policy o Basics about international trade What is this globalization business? - In 1800, most economies were similar o Europe/North America diverged from the rest in next 150-180 years - Big changes in last 20-30 years o Huge growth in (some) developing economies o Between 1950 and 1980, difference between developing economies weren’t very big o 1985-1990, divergence happened o These economies (China, India, Brazil, etc) have become relatively stronger in the MANAGEMENT in world economy - Growth not smooth (e.g. Depression) o Real GDP fell by 30% o Not necessarily smooth and unidirectional - What happened, then and now? How to understand these events better? Two Main Themes - Economy involves political decisions o Economic processes affect state power o Economic process affect domestic interests o Therefore, there’s no such thing as a ‘free market’ – politics/state power is involved in every step of the way o There are winners and losers from every economic/trade policy losers don’t stand silent, will try to get their voices heard - Globalization is neither new nor irreversible o Globalization is subject to political decisions o Trade began to restrict trade themselves o Decision to shut/open a market is a political decision o Frieden: ‘globalization is a CHOICE, not a fact’ o Can be influenced by individuals This material is boring, boring, boring, but political decisions about the economy are crucial to everyone’s lives. This lack of knowledge happens for several reasons - Economic processes are esoteric and seem like bizarre voodoo o Eg quantitative easing; synthetic collateralized debt obligation (CDO) - Economic decision-makers are not always in public eye - Economic processes seem far removed from everyday life o This is not true – there is a fair amount of political intervention in markets; not conspiracy, but organized interests come together to lobby governments to change economic policies - Economic events, while esoteric, have great impacts o Economic processes affect you - Economic events are profoundly political o You can affect economic processes As worker, consumer, shareholder/business owner, voter (not politically impotent individual)
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Poli 260 Week 8: Origins of the Global Economy Basic Principles of International Political Economy - What is the economy? - What do states care about in economic terms? -
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Poli 260 - Week 8-9 (Lecture) - Poli 260 Week 8 Origins of...

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