Economic Globalization and the History of the Global Economy

Vocabulary flashcards covering the key terms, historical trade routes, monetary systems, economic crises, and international institutions from the lecture notes on economic globalization.

Global Economy

A massive network where trade, industry, and finance intertwine across borders, acting like an intricate web where economic actions in one nation impact others.

Silk Road

An extensive ancient trade network linking Asia, Europe, and the Middle East that fostered cultural and commercial exchanges, recognized as the oldest international trade route.

Galleon Trade

A trade route initiated in 1571 connecting the Americas, Europe, and Asia through direct trade links between Spain and its colonies, cited by historians as the true birth of economic globalization.

Mercantilism

An economic theory and system from the 16th to 18th centuries emphasizing government regulation to manage a nation's economy and increase state power, often at the expense of rival nations.

Classical Liberalism

An economic paradigm that emerged in the late 18th and early 19th centuries championing free trade, open markets, and minimal state intervention in economic affairs.

Open Trade System

A international trade structure established in 1867 that encouraged participation by multiple nations and allowed fluid economic exchanges based on comparative advantage.

Gold Standard

A monetary system introduced in the 1870s in which countries pegged the value of their currencies to a specific quantity of gold at a fixed price with free convertibility.

Fiat Currency

Money that holds value primarily because a government maintains it as legal tender by decree, possessing no intrinsic value and not backed by a physical commodity.

The Great Depression

A devastating global economic crisis spanning from 1929 to 1941, characterized by trade collapses, financial panic, plummeting industrial production, deflation, and severe unemployment.

Keynesianism

An economic policy approach formulated by John Maynard Keynes asserting that insufficient aggregate demand causes depressions, advocating active government intervention through fiscal and monetary policy.

Asian Financial Crisis

A major financial and economic crisis that began in Thailand in July 1997 and spread across East and Southeast Asia, caused by over-leveraged financial sectors, unsustainable foreign debts, and currency pegs.

Great Recession

A major global economic downturn from 2007 to 2009 triggered by the collapse of the U.S. housing market boom, subprime risky loans, and major financial firm bankruptcies.

Quantitative Easing

An emergency monetary policy action used by the U.S. Federal Reserve during the Great Recession involving the purchase of government debt and home loans to inject liquidity into the economy.

Dodd-Frank Act

Strict U.S. financial regulatory legislation passed in 2010 following the Great Recession to increase oversight and reduce risk in financial markets.

Bretton Woods System

A rules-based international monetary order established in 1944 by 44 nations in New Hampshire to build economic stability, prevent protectionism, and avoid competitive currency devaluations post-WWII.

International Monetary Fund (IMF)

An international monetary institution established under Bretton Woods to oversee global monetary systems, provide financial aid during balance of payment crises, and ensure exchange rate stability.

IBRD / World Bank

An international financial institution originally created to rebuild war-torn Europe after WWII, later expanding to finance industrial development in emerging economies.

GATT (General Agreement on Tariffs and Trade)

An international trade agreement created in 1947 to reduce trade barriers, which was later replaced by the World Trade Organization (WTO) in 1995.

Global Keynesianism

The core economic philosophy of the Bretton Woods system emphasizing government regulation and public management at local, national, regional, and global levels to manage the global economy.

Neoliberalism

An economic policy paradigm that became dominant in the 1980s and 1990s, asserting that markets are self-regulating and advocating for deregulation, privatization, and minimal state intervention.

Washington Consensus

A set of 10 market-driven policy reforms developed by John Williamson and enforced by the IMF and World Bank through Structural Adjustment Programs (SAPs) for debtor nations.

Structural Adjustment Programs (SAPs)

Economic reform packages required by the IMF and World Bank as conditions for debtor nations to receive loans under the Washington Consensus framework.