Week 6 – Political Economy, Trade & Finance

A vocabulary set covering key terms, institutions, theories, and issues from Week 6 on political economy, trade, and finance.

International Political Economy (IPE)

The study of how politics and economics interact at the global level, shaping trade, finance, and development.

Economic Globalization

The growing integration and interdependence of national economies through increased trade, finance, and investment flows.

Deglobalization

A retreat from international economic integration, marked by protectionism, closed borders, and reduced multilateral cooperation.

America First Policy

A U.S. approach emphasizing national interests over global engagement, featuring isolationism and protectionism.

Isolationism

Opposition to involvement in other countries’ affairs, often reducing foreign aid and diplomatic ties.

Protectionism

Policies that restrict imports to protect domestic industries, typically via tariffs or quotas.

Intensity (of globalization)

The volume or speed of cross-border trade and financial flows.

Extensity (of globalization)

The geographic spread or reach of trade and finance across more areas of the world.

Bretton Woods Conference (1944)

Meeting of 44 Allied nations to design post-WWII economic rules, creating institutions like the IMF, World Bank, and GATT.

GATT (General Agreement on Tariffs and Trade)

1947 treaty aimed at lowering trade barriers; precursor to the WTO.

World Trade Organization (WTO)

Permanent body (est. 1995) that administers global trade rules and resolves disputes.

World Bank

Bretton Woods institution providing long-term loans and assistance for development projects.

International Monetary Fund (IMF)

Bretton Woods institution offering short-term financial assistance to stabilize economies in crisis.

Golden Age of Economic Growth

1945-1970 period of rapid global GDP per capita increases driven by productivity, infrastructure spending, and cooperation.

Miracle on the Rhine (Wirtschaftswunder)

Post-WWII rapid economic recovery and growth in West Germany, aided by currency reform and market liberalization.

Modernization Theory

View that poorer nations can ‘catch up’ by adopting Western values, institutions, and development paths.

Underdevelopment Theory

Argument that colonial legacy and exploitation prevent poorer nations from achieving the same development as rich states.

Transnational Corporation (TNC)

A firm operating in multiple countries, wielding significant economic and political influence.

Hegemon

A dominant state that shapes or leads the international system—in this context, the United States.

International Trade

Exchange of goods and services across borders, where importers in one country buy exports from another.

International Finance

Cross-border transactions using financial intermediaries (banks, funds) rather than direct goods exchange.

USD Reserve Currency

Status of the U.S. dollar as the primary currency held by governments and used in global transactions, rooted in Bretton Woods and U.S. economic strength.

End of the Gold Standard (1971)

U.S. suspension of dollar convertibility into gold, ending Bretton Woods’ fixed-exchange-rate system.

1973 Oil Crisis

Sharp rise in oil prices after OPEC embargo, contributing to the end of the post-war growth era.

Labour Exploitation

Use of low-wage or unsafe working conditions, often in global supply chains, to lower production costs.

Inequality (global)

Simultaneous fall in extreme poverty and rise in wealth disparities during globalization.

Migration (skilled vs. unskilled)

Movement of people where high-skilled workers often benefit, while low-skilled face barriers or worse conditions.

Export-Powerhouse

Country whose economy relies heavily on large-scale exports—e.g., China as the ‘world’s manufacturer.’

Supply Chain Efficiency

Ability to coordinate production and logistics swiftly and cheaply across borders, enhancing a country’s export strength.

Cheap Labour Advantage

Competitive edge gained by firms operating in regions with low wages and less stringent regulations.

Liberalism (IPE)

Theory advocating minimal state intervention and free markets to maximize global cooperation and wealth.

Realism (IPE)

Perspective that states compete for power; economic policy should prioritize national interests.

Marxism (IPE)

Critique that global capitalism produces inherent inequalities; calls for dismantling capitalist structures.

Feminism (IPE)

Lens highlighting how global economic systems and labour markets are gendered, urging gender-aware policy.