Global Liberal Order and Economics Lecture Flashcards

These vocabulary flashcards cover key concepts in global liberal order, neoliberalism, market dynamics, and the historical waves of globalization as discussed in the lecture notes.

Neoliberalism

An ideology favoring free market and capitalism, dominant since the 1990s as a form of globalized free-market capitalism.

Globalization

The interdependence and integration of the world's economies, cultures, and populations globally.

State

The central government of a country, encompassing the public sector, regulation, governance, and the enforcement of market rules.

Markets

A decentralized economic system where buyers and sellers exchange goods and services at prices they agree upon for allocating scarce resources.

Market Failure

A situation where markets do not produce the optimal amount of goods or services, such as failing to produce public goods or providing bad incentives.

Supercapitalism

A term used by Robert Reich to describe the contemporary globalized free-market system that benefits consumers and investors but leaves workers and citizens worse off.

Democratic Capitalism

The system used in the US from 1945 to 1980 in which the state heavily regulated the economy to produce greater economic equality.

Gross Domestic Product (GDP)

The total value of all things produced within a country; higher GDP usually correlates with more consumption and company profits.

Recession

A period of decline in Gross Domestic Product (GDP).

Depression

A long period of severe decline in Gross Domestic Product (GDP).

Economic Globalization

When economic activity that was formerly local or national becomes organized on a global scale through trade, production, FDI, and capital.

Outsourcing

When a company hires another firm to do work that they previously performed themselves.

Offshoring

When a company takes jobs or processes previously done in-house and moves them to another country to reduce costs or access new markets.

Foreign Direct Investment (FDI)

Investing assets from one country into organizations, structures, and equipment in another country; it does not include intangible investments.

Capital Flows

The movement of assets across national borders to purchase intangible investments like stocks and currency, which can move quickly out of a country during instability.

Economies of Agglomeration

The efficiencies and benefits gained when economic production is in close proximity or geographically concentrated.

Creative Destruction

A classical economic theory where innovative and efficient economic arrangements destroy and replace less-effective ones.

Tariff

A tax imposed on imported goods.

The China Shock

The loss of approximately $2 imes 10^{6}$ manufacturing jobs in the US during the 2000s after China joined the World Trade Organization.

Limited Liability

A legal principle where corporate owners or investors risk only the money they invest and cannot be sued for more.

Sovereignty

The independent authority of a state to govern itself and its territory.

Commodity Trap

A challenge for poor countries that get stuck selling only agricultural products and oil, limiting their economic diversification.

Bretton Woods

A 1944 meeting where world leaders planned to manage and stabilize the global economy through institutions like the World Bank and IMF.

World Trade Organization (WTO)

An international organization where countries meet to negotiate trade deals and lower tariffs.

Supply Chain

The series of steps through which raw materials are transformed into components and finally into a final product.

Active Labor Market Policies

Government spending to help workers retrain and adjust to economic shocks; Denmark spends $3.0 \%$ of GDP on these while the US spends $0.3 \%$.

Hyperglobalization

An extreme version of globalization that Dani Rodrik argues can undermine democratic politics and national sovereignty.

Global Market

The worldwide network where buyers and sellers engage in the exchange of goods and services, transcending national borders.

Examples of Offshoring

Common examples include manufacturing in China, software development in India, and call centers in the Philippines.

Examples of Outsourcing

Including hiring a payroll service, using a logistics company for supply chain management, and obtaining customer service from specialized firms.

Timeline of Economic Globalization

Key events: 1980s - Deregulation and neoliberal policies emerge; 1994 - NAFTA is formed; 2001 - China joins the WTO.

State and Market Interaction

The relationship where the government implements regulations to stabilize markets and promote economic growth.

GDP Growth Factors

Key drivers of GDP growth include consumer spending, business investment, government spending, and net exports.

Foreign Direct Investment (FDI) Examples

Examples include U.S. companies investing in European markets or Chinese investments in African infrastructure projects.

Capital Flows Dynamics

Involves inbound and outbound investments which influence currency stability and economic growth.

Benefits of Economic Globalization

Increased trade, access to foreign markets, enhanced competition, and improved innovation.

Multinational Corporations (MNCs)

Companies that operate in multiple countries, leveraging global supply chains to maximize efficiency and profits.

Examples of MNCs

Notable examples include Apple, Coca-Cola, and Unilever, which have a significant international presence.