POSC 020 Paul D'naeri FINAL

How does the theory of comparative advantage help us understand the politics of international trade?

Comparative advantage says countries gain from specializing and trading.
But politically, globalization leaves some workers behind, creating backlash.
This explains why even wealthy countries see protectionism and anger toward free trade.

Explain fiscal and monetary policies.

Fiscal policy is government spending and taxes to manage demand.
Monetary policy is central bank control of money supply and interest rates.
Fiscal deficits stimulate; higher rates cool inflation.

How are fiscal and monetary policies limited in a globalized economy?

Global markets react instantly to policy changes.
Capital flight punishes high taxes or big deficits.
Interest rate changes affect global exchange rates and investment flows.
Countries can’t fully control their economy alone.

How do exchange rates interact with the balance of trade?

A strong currency makes exports expensive and creates a trade deficit.
A weak currency makes exports cheaper which improves trade balance.
In Eurozone, countries can’t devalue, worsening crises.

What were the sources of the Bretton Woods system?

Post-WWII desire to stabilize global economy.
A response to Great Depression and interwar collapse in trade.
Created institutions (IMF/World Bank) to prevent future crises.

Explain the similarities and differences between liberalism and neomercantilism in international political economy. [Which best explains contemporary trade politics?]

Liberalism: free trade grows prosperity; cooperation benefits all.
Neomercantilism: states protect industries; trade is competition.
Today’s politics (tariffs, China–US rivalry, worker backlash) resemble neomercantilism more.

Applying the theories we have studied in this class, should we expect free trade to increase, decrease, or stay level in the coming decade?

Free trade will decrease or stay flat.
Notes show globalization backlash: Brexit, Trump tariffs, inflation concerns.
Both U.S. parties now support protectionism.

How does the principle of nondiscrimination differ from that of reciprocity in international trade?

Nondiscrimination means treating all trading partners equally (MFN rule).
Reciprocity: “I lower barriers only if you do.”
One is universal; the other is conditional.

How do domestic and international factors interact in producing trade policies?

Domestic factors: voters punish rising prices; industries lobby; nationalism grows.
International factors: global supply chains, contagion, alliances, competition.
Policy outcomes blend both (e.g., U.S. tariffs + inflation politics).

What tradeoffs do states face in choosing an approach to international monetary policy?

“Impossible trinity”: can’t have all three—
(1) fixed exchange rate
(2) free capital movement
(3) independent monetary policy
Countries choose 2 and sacrifice the 3rd.

What forces are pushing toward deglobalization, and what would the consequences be?

Populism, inequality, nationalism, supply-chain fears, great-power rivalry.
Consequences are higher prices, slower growth, fragile global cooperation, crisis contagion harder to manage.

What were the roots of the European financial crisis?

Cheap euro loans brought massive borrowing (especially Greece).
Debt spirals and austerity brought a European recession.
No ability to devalue currency or set own rates.
Banks across Europe exposed to Greek debt.

How has the common use of the Euro complicated efforts to combat economic crisis in Europe?

Euro members can’t adjust exchange rates.
Can’t run independent monetary policy.
Austerity rules limit fiscal stimulus.
Crisis response slowed because policy is shared, not national.

What are the main ingredients of international currency crises? [What might be done to prevent them?]

High debt, weak banks, falling confidence, rapid capital flight.
Feedback loop: fear turns into currency selling, developing a higher debt burden.
Prevention: credible “lender of last resort,” transparency, reserves, better regulation.

What challenges should we expect in solving the next international financial crisis?

Less global coordination, U.S. less willing to lead, Europe divided.
Contagion spreads faster than policy responses.
Domestic politics push protectionism, not cooperation.

How do different ways of measuring poverty influence how we see the problem?

Income-only measures show financial deprivation.
Multidimensional measures show health, education, access.
Different measures change whether poverty seems improving or worsening.

What challenges do late developing countries face?

Weak infrastructure, weak institutions, dependence on richer economies.
Global competition forces them into low-value manufacturing.
Debt and volatility limit policy freedom.

What are the strengths and weaknesses of international aid in reducing global poverty?

Strengths: lifesaving help, investment in health/education, stabilizes crises.
Weaknesses: dependency, corruption, donor political agendas, limited long-term growth.

What are the main sources of international law?

Treaties, customary practices, legal principles, and court rulings.
Enforced mainly through norms, reputation, and reciprocity.

What are the most important similarities and differences between international and domestic law?

Domestic law has enforcement (courts, police).
International law lacks central authority—relies on norms and reputation.
Both create rules, but domestic is enforceable; international is political.

What dilemma do weak nations face in deciding whether to support more or less international law?

More law: protects them from powerful states.
Less law: gives them freedom to grow without constraints.
Choosing depends on whether they fear domination or loss of autonomy.

How does globalization shape organized crime and efforts to combat it?

Global networks expand smuggling, cybercrime, laundering.
Criminals exploit weak borders and mismatched jurisdictions.
States respond with cross-border policing (EU warrants, US-Mexico cooperation).

What are the benefits and costs of migration for “sending” countries?

Benefits: remittances, reduced unemployment, returning skilled workers.
Costs: brain drain, labor shortages, reliance on migration for income.

What is the “tragedy of the commons” [and what are its implications for the international environment]?

Individuals overuse shared resources because it’s rational for them.
Outcome: collective destruction of the resource.
International environment = overfishing, emissions, water depletion.

Which of the five paradigms we have studied provides the most compelling analysis of international environmental politics?

Realism and collective-action logic.
Realism says states won’t sacrifice competitiveness.
Collective-action models explain why Paris Agreement lacks enforcement.

What are the links between international environmental problems and economic development?

Poor countries rely on cheap fossil fuels and resource extraction.
Development increases emissions unless managed well.
Environmental harm slows development through disasters, water issues.

Will environmental problems lead to greater cooperation or increased conflict in the international system; or will they have little effect?

Both.
Resource scarcity can fuel conflict (water, food, oil).
Shared climate threats push cooperation (Paris, adaptation efforts).
Impact depends on region and domestic politics.