International Relations - Ch. 8: Economic Security

Exam 3

Economic Security

A condition where individuals and communities have stable income and resources to support a standard of living.

Mercantilism

An economic policy that emphasizes the role of the state in managing the economy, promoting exports, and minimizing imports to enhance state power.

This led to a “beggar-thy-neighbor” system

Mercantilism - National Economy Era

beggar-thy-neighbor system

improving your own economic situation at the expense of others, placing higher tariffs or lowering imports - reduces your trade with others.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another country.

Absolute Advantage

When a country can produce a good more efficiently than another country.

Liberalism - Economic philosophy

A political and economic philosophy advocating for free markets, free trade, and limited government intervention. Invisible hand in markets. Adam Smith.

Protectionism

Economic policy that restricts imports to protect domestic industries, often through tariffs. Protecting oneselves, becoming more closed off, etc.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale.

International Monetary Fund (IMF)

An international organization working to foster global monetary cooperation and financial stability, primarily through providing loans and financial support.

World Trade Organization (WTO)

An intergovernmental organization that regulates international trade and provides a framework for trade negotiations.

Bretton Woods System

An international monetary order established in 1944 to regulate currency exchange rates and provide economic stability. Produced the following:

• World bank

• International Monetary Fund (IMF)

• General Agreement on Tariffs & Trade (GATT) - Later on

Colonialism

The practice of acquiring full or partial political control over another country, occupying it with settlers, and exploiting it economically.

Non-state Actors

Entities that participate in international relations but are not affiliated with any specific state, such as NGOs and multinational corporations.

Liberal International Economic Order (LIEO)

A system of international economic relations based on liberal principles promoting free trade and economic cooperation.

Economic Integration

The process by which countries reduce trade barriers to promote trade and economic cooperation.

Trade Wars

Economic conflict resulting from the imposition of tariffs or other trade barriers by countries against each other.

Hyperinflation

An extremely rapid or out of control inflation, often exceeding 50% per month.

Industrial Revolution Impacts

• Primary products - Finished goods

• Agriculture - manufacturing

• Initial Increase in global trade, UK in the center