- Horizontal integration and vertical integration of investment
Horizontal integration Also when an MNC produces the same product in many different
countries. They do so when a cost advantage is gained by placing a number of production
facilities under co
The Persistence of Capitalism
It is convenient both to blame the Great Depression on classical liberalism run amok; and
to use the subsequent recovery as a justification as a triumph of government regulation
- Why does the natural resource curse exist, according to Sachs and Warner? What are
their major arguments concerning the resource curse?
1. Crowding out
2. Decreased export competitiveness
3. Less entrepreneurial activity
4. Less education
5. Less innova
- According to Broz, why did the UK need other countries to maintain the gold standard?
- Reasons for the decline of Keynesian ideas after 1970s, particularly ideas about the
natural rate of unemployment.
Governments gradually, and in many cases grudgingl
- What is contrast Acemoglu draws in types of institutions put in place by European
colonizers which kinds of institutions were better for development and why?
Extractive vs Developed
-Diamonds specific explanations for why geography is so important in ex
- What were similarities of countries hit by financial crises in the 1990s?
1. few regulatory checks on the lending practices
- How did Asian banks put their economies at risk?
Unholy trinity, bank borrowing from abroad to give expensive loans ER risk, ri
- What is IMF recidivism? Why is it a problem? What kind of evidence exists that shows
how effective IMF programs are?
When a country returns to IMF for borrowing. Because it highlights problems with IMF lending
structure. The completion of programs. Comp
Partisan Same as electoral model but in the partisan model, however, different political parties
pursue distinct macroeconomic objectives. Some parties use monetary policy to reduce
unemployment and are forced to float their currency. Other parties use mo
- Patterns of FDI in postwar period why do MNCs exist? What are potential drawbacks
and benefits of FDI?
Why do MNCs Exist:
Market imperfections drive internalization of transactions: Specific assets and vertical
integration, intangible assets and hori
Be able to identify the possible causes behind the collapse of Bretton Woods in the 1970s,
especially potential political explanations
$ became so popular that there were more claims on gold reserves than actual gold.
Political France argued it favo
Locational incentives for investment- some examples
Locational advantages derive from specific country characteristics that provide opportunities to
acquire raw material, produce or sell in foreign countries. Some locational advantages are:
What is current account, capital account?
Current account - records all current (nonfinancial) transactions between one countrys residents
and the rest of the world.
Capital account - registers financial flows between a country and the rest of the world.
Post hoc, ergo propter hoc is a Latin phrase meaning After-therefore-because of. This
is falsely used as a simple explanation for many historical events. Essentially it means
because X and Y occurred, and later Z came into existence, Z was caused