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Previous ID Questions - Previous ID Questions: Midterm 2

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Previous ID Questions: Midterm 2 ISI: Import Substitution Industrialization is a political and economical strategy for developing a country’s  industrial sector by blocking imports of industrial goods, forcing domestic demand to support national  industries. South Korea pursued ISI from 1950 to 1963 quite seriously before switching to Export Oriented  Industrialization. ISI can cause many problems, like domestic market distortion, bottle necks in production,  inefficient industries that rely on a captive market, and rent seeking. The performance and longevity of ISI  depends on factors like size of the domestic market; however ISI is supposed to be employed as a temporary  policy, although this rarely is the case.  Mundell-Fleming: Is a condition which describes the trilemma policymakers face in regard to three economical  factors; stability of exchange rate, openness of capital markets and domestic monetary policy autonomy.  Because the three are intertwined, according the Mundell Fleming conditions governments must choose two to  manage. Mundell-Fleming conditions describes how policymakers preference on any two dimensions of  monetary policy will affect their decision on the third. The Mundell Fleming conditions are useful way to discuss  the acceptance of globalizing economic pressures and opportunities on domestic monetary affairs. EOI: Export Oriented Industrialization is a strategy for developing a country’s industrial sector by selling its 
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This note was uploaded on 02/11/2012 for the course POLI 243 taught by Professor Markbrawley during the Spring '09 term at McGill.

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Previous ID Questions - Previous ID Questions: Midterm 2

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