Term
|
Definition
| Debit and credit transactions that residents, firms, and governments of a state have with the rest of the world |
|
|
Term
| Two main balance of payment items |
|
Definition
1) The current account
2) Capital account |
|
|
Term
|
Definition
| In BOP. Includes all transactions related to state current expenditures and national income |
|
|
Term
|
Definition
| All movements of financial capital into and out of a state |
|
|
Term
| Current account: 4 types of transactions and their definitions |
|
Definition
1) Merchandise Trade-trade in tangible goods
2) Services Trade- trade in intangable intems
3)Investment Income-Interest and dividend payments on inversments by citizens
4) Remittances and official transactions-income migrant workers or foreign companies send out of a country, military and foreign aid. Salaries and pensions paid to gov employees abroad |
|
|
Term
| Capital Account (also short and long term capital flows) |
|
Definition
| Long and short term capital flows. Capital exports are debit items. Imports are credit items. Short term investments have maturity of less than a year. Long term flows subdivided into FDI and portfolio investment |
|
|
Term
| Foreign Direct Investment |
|
Definition
| FDI. Capital investment in a branch plant or subsidiary of an MNC in which investor has some operating control |
|
|
Term
|
Definition
| The purchase of stocks and bonds that does not involve operating control |
|
|
Term
|
Definition
| Errors in data collection. Recording of all the goods, services, and capital that was not recorded |
|
|
Term
| Change in official reserves |
|
Definition
| When a country has a deficit in current and capital accounts, its overall reserves are depleted. when it has a surplus in both of those, reserves are increased. The reserves are a means to ensure that the balance of payment for a country comes out to 0 |
|
|
Term
|
Definition
| Changes in money supply. Central bank tries to reduce BOP by controlling access to money |
|
|
Term
| 3 Ways Central Bank controlls $ access: |
|
Definition
1) Raise/lower interest rates to make borrowing more costly
2)Require banks to increase/decrease reserves
3) Buy/sell gov bonds from banks and securities to increase/decrease amount of money in economy |
|
|
Term
|
Definition
| Changes in taxes and government spending. Remedy BOP by affecting public's purchasing power, also controlling amount of money gov has |
|
|
Term
| Ways government controls $ supply |
|
Definition
1) Raise/lower taxes to change consumer purchasing power
2) Increase/decrease government spending |
|
|
Term
|
Definition
| Changes in trade flows. Remedy BOP by regulating trade flows |
|
|
Term
| Ways gov controls imports/exports |
|
Definition
1) Raise/lower tariffs and non-tariff barriers
2) Tax incentives/disincentives for foreign investors
3) Currency devaluation or revaluation |
|
|
Term
| Ways to finance BOP disequilibrium |
|
Definition
1) borrow from external credit sources
2) Decrease foreign exchange reserves |
|
|
Term
Problems of
1)Financing BOP
2)Fiscal Policy
3)Commercial policy |
|
Definition
1) More debt makes foreign investors less likely
2) Slows business activity, could increase unemployment and cut social programs for needy
3) Triggers retaliation from others |
|
|
Term
|
Definition
| Uphold adjustable peg exchange rate system and provide short-term loans for BOP problems |
|
|
Term
| IMF articles of agreement |
|
Definition
1) Members must peg their currency to gold or dollar
2) Members required to contribute to pool of reserve currencies for loans,
3) Members are assigned quotas based on economic influence, reviewed every 5 years |
|
|
Term
|
Definition
| Simple majority-used for most decisions. one country-one vote. south can exert influence through bloc-voting. Weighted voting system: economically powerful states have largest quotas and votes |
|
|
Term
| IMF Istanbul Annual Meeting important points |
|
Definition
1) 5% shift in voting power, better balance b/t developed & developing countries
2) Expand flexible credit line
3) Looking for China to contribute more
4) Beef up SDR reserves |
|
|
Term
|
Definition
| IMF. New quick massive loan program provided to countries with usual conditionality req. For countries with sound financial policies that have a temporary monetary crisis |
|
|
Term
|
Definition
| IMF. Somewhat like monopoly money given to bailout countries, can be converted to their currency. Countries can use them in settling IMF financial obligations |
|
|
Term
|
Definition
| Based on notion of adjustable peg rate system. Market determines currency valuations. Removal of capital controls. Liberal policy |
|
|
Term
| Future challenges for monetary system |
|
Definition
1) Euro likely to challenge the dollar in this century. Will increase european power
2) Need for US-EU-East Asian cooperation to promote stability and prevent misalignment of currency |
|
|
Term
|
Definition
| Founded at BW with IMF. Goal: To provide intl development financing for LDCs and emerging centrally planned economies. Members must first be members of IMF. Largest lender of funds for INTL development |
|
|
Term
|
Definition
| Weighted voting based on relative economic strength. Quotas determine financial contribution and votes |
|
|
Term
|
Definition
| IBRD, IFC, IDA, ICSID, MIGA |
|
|
Term
|
Definition
| Provides loans only to governments |
|
|
Term
|
Definition
| World Bank. Loans to private ventures in LDCs |
|
|
Term
|
Definition
| World Bank. Soft loans (credits) to poorer govs with no interest rate. 10 yr grace period, 35-40 yr maturities. Formed in response to LDC complaints about IBRD interest rates |
|
|
Term
|
Definition
| World Bank. Soft loans (credits) to poorer govs with no interest rate. 10 yr grace period, 35-40 yr maturities |
|
|
Term
|
Definition
| World Bank. Soft loans (credits) to poorer govs with no interest rate. 10 yr grace period, 35-40 yr maturities |
|
|
Term
|
Definition
| World Bank. Forum for arbitration of disputes over FDI. Arose b/c foreign investors and countries had issues with courts |
|
|
Term
|
Definition
| World Bank. Provides technical assistance to LDCs and guarentees to foreign investors against losses caused by LDC instability |
|
|
Term
| List of US power over World Bank |
|
Definition
1) Most votes
2) WB in DC
3) WB president always American
4) English is WB official language
5) US has veto power over formal ammendments over articles of agreement and decisions to increase WB capital
6) US can withold IDA replenishments if it objects to WB policies |
|
|
Term
|
Definition
1) Infrastructure phase
2) Poverty Reduction phase
3) Orthodox liberal phase
4) Interventionist liberal phase |
|
|
Term
|
Definition
| WB thinking. Focused on financing large projects. Weakness was worsening income dist within LDCs |
|
|
Term
|
Definition
| Focused more on basic health, education, and family services to poor. Increased financing of agriculture and rural development programs. Weakness detracted from economic growth within LDCs |
|
|
Term
|
Definition
| WB thinking. Structural adjustment programs/loans conditioned on privatization, defegulation and liberalization globally. Washington consensus and free markets. Weakness worsening inequality bc poverty reduction neglected |
|
|
Term
| Interventionist liberal phase |
|
Definition
| Seeks to combine liberal policies with poverty reduction strategies. Recognizes one size does not fit all |
|
|
Term
|
Definition
1) Reduce poverty by 1/2 by 2015
2)Reduce child mortality by 2/3 by 2015
3)Ensure all children complete full course of schooling
4)Halt & reverse spread of HIV/AIDS, malaria, and other diseases
5)Reduce proportion of ppl without access to drinking water by half
6)Eliminate gender disparities in primary/secondary edu by 2005, all levels by 2015 |
|
|
Term
|
Definition
1)Secure public health
2)promote education
3)aid agricultural dev
4)commit .7% of GDP to ODA |
|
|
Term
| Official Development Assistance |
|
Definition
| Sum of all grants, sub market rate loans, and technical assistance made to developing countries by a gov for development and welfare |
|
|
Term
| Transformational Developments |
|
Definition
| Investment in schools, hospitals/clinics, water, electricity, roads, sanitation and dem institutions |
|
|
Term
|
Definition
| Dollar value of all final goods and services produced for consumption |
|
|
Term
|
Definition
| total value of goods/services produced within a country AND its income received from other countries (interests and dividends) |
|
|
Term
| Fairness of aid issues (6) |
|
Definition
1)US increased military budget by $100 billion
2)Europe subsidizes agriculture, while demanding other nations liberalize markets
3)US subsidizes agriculture
4)Foreign aid amounts to 50-55 billion per year
5)LDC countries pay 200 billion to rich countries each year
6)more aid money goes to richer poor countries than the truly poor, bc govs are more willing to loan to emerging countries that truly poor ones |
|
|
Term
|
Definition
1)Support strategic states
2)promote transformational development
3)provide humanitarian releif
4)address global issues
5)strengthening fragile states |
|
|
Term
| How does USAID identify countries for Goal 1? |
|
Definition
| Goals that will best serve US foreign policy interests, and by feasibility of achieving development results. Focus on Iraq, Afghanistan and Pakistan |
|
|
Term
|
Definition
| BOP problem. When a country lacks sufficient foreign exchange to make the principal/interest payments on debt obligations. |
|
|
Term
|
Definition
| Ratio of a country's interest and principal payments on its debt to its export income. Used to assess ability to repay foreign debt |
|
|
Term
| Causes of 1980s foreign debt crisis |
|
Definition
1)External factors in global economy
2)Over-lending by private commercial banks
3)borrower incompetence
4)South's dependance on North |
|
|
Term
| External factors in global economy that led to 1980s debt crisis |
|
Definition
1)72-73 global food shortage
2)73 & 79 oil crisis
3)81 recession
4)82 Mexican announcement of 78 billion debt default |
|
|
Term
|
Definition
1)Emergency Plan
2)Baker Plan
3)Brady Plan
4)HIPC Initiative |
|
|
Term
| 3 Overall objectives US followed in debt crisis |
|
Definition
1)prevent collapse of intl financial and banking system
2)restore capital market access for debtors
3)restore economic growth |
|
|
Term
|
Definition
1)Breaks down nat'l trade barriers
2)gains from increased efficiency outweigh costs
3)strengthens political/security ties
4)speedier than WTO in freeing up trade
5)improves competitiveness of MNCs |
|
|
Term
|
Definition
1)Divides world into competing trade blocs
2)race to the bottom with MNCs
3)displaced workers lose out
4)reinforces dependance of poor states on rich |
|
|
Term
| Trade Creation "Building block" |
|
Definition
| Increased trade among RTA members shifts demand from less to more efficient production. Increased regional competition fosters support for free trade at global level |
|
|
Term
| Trade Diversion "Stumbling Block" |
|
Definition
1)RTAs raise barriers against outsiders to compensate for reduced barriers inside
2)Investment diversion occurs when MNCs more production inside RTA to produce locally and utilize tariff free zones
3)Jobs are diverted out of one country to another to utilize the new access |
|
|
Term
| Rules of Origin "made in" |
|
Definition
| Determine whether goods crossing borders within FTA qualify for duty-free treatment |
|
|
Term
| Article 24 GATT/WTO and conditions |
|
Definition
Permits formation of FTAs and CUs.
Conditions
1)must remove tariffs and other trade barriers on substantially all trade among members within reasonable period
2)Must not raise tariffs and other barriers on the average toward non-members |
|
|
Term
|
Definition
1)Treaty under int law
2)Congressional-executive agreement under US law
3)Lesser than EU. Doesn't create supranational gov bodies or body of laws
4)Eliminates majority of tariffs between US Mexico and Canada
5)Requires MFN/national treatment for foreign investors
6)prohibits performance requirements
7)binding arbitration of disputes
8)private actors can sue a NAFTA govt directly |
|
|
Term
|
Definition
1)NAALC -- Labor agreement
2)NAAEC -- Environmental agreement
3)CEC--Under NAAEC, regulatory agency
4)NADBank--Under NAAEC, provides financing for investments in pollution reduction
5)BECC--Under NAAEC, heading environmental projects in Mexico with NADBank |
|
|
Term
|
Definition
| A type of FDI. Ceation of factory or new productive asset in host country |
|
|
Term
|
Definition
| FDI. Purchase of stock in existing firm with purpose of management participation. Aquisitions most common form of FDI |
|
|
Term
|
Definition
1)Increase efficiency in use of world resources
2)Stimulate innovation, competition and growth
3)Creates employment in host countries
4)Provide host countries with capital, technology, & managerial/marketing networks |
|
|
Term
|
Definition
1)Undermines host country's nat sovereinty and autonomous economic development
2)Impose downward pressures on labor and environment
3) Export jobs from home countries to host countries
4)Create dependancy relationships
5)Increase income inequality in host countries |
|
|
Term
|
Definition
1)Nationalization
2)Performance Requirements
3)Capital Controls
4)Discrimination |
|
|
Term
| Bilateral Investment Treaties, aspects of |
|
Definition
FTAs for investment.
1)Prohibits nationalization w/o prompt and adequate compensation
2)Prohibits performance requirements
3)Provide dispute resolution mechanisms
4)Most BITs between LDCs and DCs |
|
|
Term
|
Definition
| Effort to keep the price of oil economically attractive but also low enough to discourage competing forms of energy |
|
|
Term
OPEC members
and original members |
|
Definition
1)Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, Venezuela
2)Originals: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela |
|
|
Term
|
Definition
1)Member nations could regain control from oil companies
2)Ensure stable oil prices
3)Secure steady income for producing nations
4)Secure efficient, economic, and regular supply of oil to consuming nations
4)ensure a fair return on capital |
|
|
Term
|
Definition
1)Iraq persuaded OPEC to raise oil prices so it could pay off war debts & rebuild infrastructure from Iran
2)Kuwait failed to go along with production quota and overproduced
3)Iraq claimed Kuwait was deliberately undermining its economy
4)Iraq invaded, giving it control of 1/5 of world oil |
|
|
Term
| Steps to reduce US vulnerability to an oil crisis |
|
Definition
1)Diversify oil supplies
2)Use Strategic Reserves
3)Boost industrial efficiency
4)Raise fuel efficiency standards
5)Develop Renewable Energies
6)Phase in fuel taxes |
|
|
Term
| Principle of Sustainable Development |
|
Definition
| Rio Declaration. Continued economic growth and development and population growth happen and bring global population to acceptable living standards without damaging earth. Growth can occur along with sustainability |
|
|
Term
| Principle of Common but Differentiated Responsibility to the environment |
|
Definition
| All countries are responsible for global environmental problems, some countries are more responsible |
|
|
Term
|
Definition
| If there is a threat of irreversible environmental damage, lack of scientific certainty is not a reason to postpone measures to prevent enviro degradation |
|
|
Term
|
Definition
| From Stockholm Declaration. Says that states have responsibility to activities within their jurisdiction/control do not harm environment of other nations |
|
|
Term
|
Definition
| UN Environmental Program. Formed at Stockholm Declaration. Institutional arrangement within UN for protection and improvement of environment. Formed IPCC |
|
|
Term
| Four essentials from Copenhagen Climate Summit |
|
Definition
1)Commitments by developed countries to reduce emissions of Greenhouse gasses
2)Commitments by developing countries to do the same
3)Financing for developing countries making commitments
4)Decision on how to manage financing |
|
|
Term
| How does cap-and-trade work? |
|
Definition
1)Central authority sets a limit on the amount of a pollutant that can be emitted
2)Companies/states issued emission permits and required to hold equivalent number of allowances, which represent the right to emit a certain amount
3)Total allowances cannot exceed the cap, limits emissions to that level
4)Those that must pollute more must buy emissions credits from those that pollute less |
|
|
Term
|
Definition
| When the number of people exceed the available sustainable resources of their habitat |
|
|
Term
| Policy Proposals to Regulate Population Growth |
|
Definition
1)Fund family planning/birth control initiatives
2)Invest in edu for all children in developing world
3)Promote feminism and women's independence worldwide
4)Establish a IIO to coordinate immigration policy/movements
5)Incentive rural development to combat urbanization
6)Explore outer space |
|
|
Term
| Who wrote the bottom billion? |
|
Definition
|
|
Term
| What country copied all other countries in building their health system? |
|
Definition
|
|
Term
| Agreements of Gleneagles G-8 Summit |
|
Definition
1)Cancelled 40 bil of debt from really poor countries to IOs
2)double foreign aid
3)end all export subsidies by 2010
4)provide universal access to HIV/AID treatment by 2010
4)collective foreign aid targets
5)full funding to eradicate polio
6)ensure access to primary school for all children by 2015 |
|
|
