Global Political Economy and Contemporary World Economic Structure

Vocabulary practice flashcards covering fundamental concepts, theoretical perspectives, macroeconomic measurement, historical eras, and governance structures in Global Political Economy.

International Political Economy (IPE)

The study of how economic and political phenomena affect one another across state borders, combining economics, political science, and international relations.

Global Political Economy (GPE)

A field focusing on the global system where states, companies, and citizens influence resource allocation, examining the relationship between public and private power.

Economic Activity

The processes through which people obtain goods and services to meet their needs and wants, including the work and resources required to produce them.

Circular-Flow Model

An economic model showing how households and firms exchange resources, goods, services, and money across the market for factors of production and the market for goods and services.

Real Flows

The movement of physical inputs and outputs (resources, goods, and services) between households and firms.

Money Flows

The movement of monetary payments (income and spending) between households and firms.

Neoclassical Economics

An economic approach focusing on rational decisions and free markets that favors limited government intervention.

Keynesian Economics

An economic approach emphasizing the role of aggregate demand and giving government an important role in providing public goods and increasing spending during recessions.

Institutional Economics

An economic perspective arguing that markets depend on laws, financial systems, and social values, with government helping to shape market operations.

Case Study

An IPE research method that investigates a specific event or issue in detail to identify possible causes and generate theories.

Large-N Study

An IPE research method that compares many cases using data and statistics to find general patterns.

Rational Choice

An analytical approach explaining economic and political outcomes through individual actors comparing costs and benefits to maximize self-interest.

Free-Rider Problem

A market failure where individuals prefer to let others pay for a public good while still enjoying its benefits.

Institutionalism

An approach explaining economic and political outcomes through formal written rules (laws and regulations) and informal unwritten rules (traditions and social norms) that shape choices.

Constructivism

An analytical approach focusing on how social beliefs, values, and ideas shape political and economic structures, and how society shapes beliefs in return.

Economic Nationalism

A GPE theory asserting that the state comes first and that governments should use the economy to protect national security, domestic production, and state power.

Tariffs

Taxes levied by a government on imported goods.

Subsidies

Financial assistance payments provided by the government to domestic firms.

Investment Restrictions

Government limits placed on foreign investment, particularly in strategic domestic industries.

Zero-Sum Game

A perspective in international relations where one participant's gain is exactly equal to another participant's loss.

Hegemonic State

A dominant country with sufficient power to influence and enforce the rules and organization of the international system.

Economic Liberalism

A GPE perspective emphasizing the freedom of individuals and firms to make choices, specialize, and trade to maximize utility and create mutual benefits.

Utility

The maximum possible benefit or satisfaction an economic actor receives from a decision or choice.

Specialisation

Concentrating production efforts on specific goods or services to increase efficiency.

Comparative Advantage

The ability of an economic actor or country to produce a good or service at a lower opportunity cost than competitors.

Positive-Sum Game

A situation where international economic trade and cooperation yield mutual gains, benefiting all participants.

Critical Perspectives

GPE approaches that question how the global economy is organized, examining power imbalances and inequalities related to class, gender, race, and the environment.

Marxism

A critical approach focusing on social classes and production relations, examining how capitalism creates exploitation and uneven development.

Feminism (in GPE)

A critical framework examining gender inequality, patriarchy, and the gendered impacts of global economic structures.

Environmentalism

A perspective focusing on ecological degradation and environmental costs resulting from economic activity and continuous growth.

Postcolonial Analysis

A critical approach examining power imbalances and inequalities linked to colonial history and relations between the Global North and Global South.

Economic Growth

An increase in the total quantity of goods and services produced by an economy over time.

Economic Development

A process of social and economic change that improves living standards, capabilities, and opportunities for people.

Export-Oriented Industrialisation (EOI)

A economic development strategy focusing on building industries that manufacture goods for international export based on comparative advantage.

Washington Consensus

A set of economic policy recommendations formulated by John Williamson in 1990 emphasizing macroeconomic stability, economic openness, privatisation, and deregulation.

Privatisation

The transfer of state-owned enterprises, property, or public services to private ownership.

Deregulation

The removal or reduction of government restrictions and rules on business and economic activity.

Developmental State School

A perspective asserting that governments should actively direct national development by supporting domestic production through strategies like import substitution industrialisation.

Import Substitution Industrialisation (ISI)

A development strategy aimed at replacing imported manufactured products with locally produced domestic goods through protective tariffs and government support.

Infant Industries

Newly established domestic industries that require temporary government protection and subsidies until they become internationally competitive.

Intermediate Goods

Inputs, materials, or components used up in the production process to produce final goods.

Human Development

An approach to development centered on expanding human capabilities, living choices, and freedoms.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Degrowth

An economic framework questioning continuous output growth and prioritizing human well-being and ecological sustainability.

Care Economy

An economic sector comprising paid and unpaid work devoted to caring for children, elderly, and ill individuals.

Economic Aggregates

Macroeconomic indicators measuring real activity (production) and financial activity to diagnose, compare, and forecast economic performance.

Gross Domestic Product (GDP)

The total monetary value of all final goods and services produced within a country's geographic borders during a specified period.

Final Goods and Services

Products purchased for ultimate consumption or investment, excluding intermediate goods used up in production.

Production Method (GDP)

A method of calculating GDP by summing the gross value added across all production stages plus taxes minus subsidies on products.

Gross Value Added (GVA)

The net value generated by a producer, calculated as output minus intermediate consumption: $\text{GVA} = \text{Output} - \text{Intermediate Consumption}$.

Expenditure Method (GDP)

A method of calculating GDP by summing all final spending in an economy, given by the formula $GDP = C + G + I + (X - M)$.

Income Method (GDP)

A method of calculating GDP by adding all factor incomes paid to factors of production (wages, rent, interest, and profit).

Indirect Taxes

Taxes, such as sales tax or VAT, levied on goods and services that increase market prices and are collected by the government.

Depreciation

The loss in value of fixed physical capital (machinery, buildings) due to wear, tear, and obsolescence over time.

Net Income From Abroad

Income received by domestic residents from foreign economic activities minus income earned by non-residents from domestic production.

National vs Domestic Concept

The distinction where National refers to income earned by residents regardless of geography, and Domestic refers to output produced physically within a country.

Wealth

The cumulative stock of physical and financial assets owned by an individual or nation at a given point in time.

Disposable Income

The net income available to households for spending and saving after deducting direct taxes and adding social benefit transfers.

Multidimensional Poverty Index (MPI)

An indicator that assesses poverty by identifying overlapping deprivations experienced simultaneously in health, education, and living standards.

Human Development Index (HDI)

A composite UNDP index measuring country achievements in health (life expectancy), education (schooling), and living standards (GNI per capita).

Champagne Glass Distribution

A model illustrating extreme global income inequality, showing the richest $20\%$ receiving $82.7\%$ of global income while the poorest $20\%$ receive $1.4\%$.

Lorenz Curve

A graph plotting cumulative population percentage against cumulative income percentage to visualize relative income inequality.

Gini Index

A mathematical indicator of inequality ranging from $0$ (perfect equality) to $1$ (perfect inequality), representing the deviation of a Lorenz curve from the line of equality.

Globalization

The historical process of growing economic, technological, political, and social interconnectedness across national borders.

Mercantilism

An economic policy dominant in the 15th through 18th centuries linking state power directly to wealth accumulation (precious metals) and trade protectionism.

Gold Standard

An international monetary regime where national currencies are fixed to a specific weight of gold to facilitate trade stability.

Great Depression

The severe global economic crisis beginning in 1929 marked by dramatic falls in production, extreme unemployment, and widespread tariff hikes.

Golden Age of Capitalism

The period between 1945 and 1973 characterized by rapid economic growth, rising productivity, high employment, and low inflation in Western developed nations.

Keynesian Aggregate Demand Equation

The macroeconomic formula defining aggregate expenditure as sum of consumption, investment, government spending, and net exports: $Y = C + I + G + X - M$.

Bretton Woods System

The post-WWII monetary framework establishing fixed exchange rates pegged to the US dollar (convertible to gold) and creating the IMF and World Bank.

Cold War Political Economies

The competing economic frameworks during the Cold War era consisting of Western capitalism, Soviet central planning, and diverse Global South strategies.

International Monetary Fund (IMF)

An international financial organization created at Bretton Woods to ensure exchange rate stability and assist countries with balance of payments issues.

World Bank

An international institution established at Bretton Woods to fund economic reconstruction and facilitate development projects.

General Agreement on Tariffs and Trade (GATT)

A post-WWII international agreement designed to promote trade liberalization through structured tariff reduction negotiations.

Welfare State

A state model where the government provides key public services, social benefits, progressive taxes, and labour protection to reduce social inequality.

Progressive Taxation

A tax system in which tax rates increase as an individual's or household's taxable income level rises.

Stagflation

An economic phenomenon characterized by simultaneous stagnant growth, high unemployment, and elevated inflation rates.

Collectivization

A communist policy transforming private individual agricultural landholdings into state- or collective-run agricultural units.

Price Scissors

A state-controlled price dynamic where agricultural prices are kept artificially low relative to higher prices for manufactured industrial goods.

Asian Tigers

The rapidly industrializing economies of South Korea, Hong Kong, Taiwan, and Singapore that achieved high growth through export-driven strategies.

Petrodollar Recycling

The reinvestment or lending of surplus foreign exchange revenues earned from oil exports through international banking systems.

Terms of Trade

The relative ratio between export prices and import prices, measuring the purchasing power of a country's exports.

Austerity

Economic policies aimed at reducing public spending and budget deficits, often implemented during debt crises.

Neoliberalism

An economic policy paradigm promoting market competition, deregulation, trade openness, privatization, and reduced government spending.

Household Debt-to-Income Ratio

An indicator comparing average total household financial liabilities to annual disposable income.

Fluctuations in US Government Size (1870–2019)

Historical trend data showing a long-term rise in US government revenue as a percentage of GDP alongside stabilizing economic growth cycles.

US Productivity, Unemployment, and Inequality Trends (1914–2015)

Historical US series demonstrating high productivity during the Golden Age and a marked increase in the income share of the top $1\%$ starting in the late 1970s.

Leapfrogging

The adoption of advanced technological systems while completely skipping earlier infrastructural evolutionary stages.

Automation

The deployment of digital technologies or machinery to complete tasks formerly performed by human labour.

Offshoring

Relocating business processes or industrial activities to another country to leverage lower operational costs.

Structural Change

A fundamental long-term shift in the relative weight of major sectors (agriculture, industry, services) within an economy.

Competition State

A state framework prioritizing national economic competitiveness, foreign investment attraction, and market flexibility over social welfare protection.

Foreign Direct Investment (FDI)

Direct capital investment made by foreign business entities into physical assets, operations, or factories within a recipient country.

Tax Havens

Jurisdictions offering minimal or zero tax liability and secrecy laws to attract foreign individuals and corporate capital.

Export Processing Zones (EPZs)

Designated geographical zones offering special tax cuts, regulatory waivers, and trade advantages to businesses producing exports.

Global Governance

The network of international institutions, treaties, rules, and cross-border cooperation mechanisms that coordinate international activity.

Sustainable Development Goals (SDGs)

A framework of 17 UN goals established under the 2030 Agenda addressing poverty, hunger, inequality, health, climate change, and education.