The Architecture of Economic Globalization

Vocabulary-style flashcards covering the historical development, institutional pillars, corporate strategies, and modern frictions of economic globalization.

Economic Integration (IMF Definition)

The increasing integration and interdependence of economies around the world through the movement of goods, services, and capital across borders.

Technology (Convergence Pillar)

Improvements in transit and communication that drive the interdependence of global economies.

Taste (Convergence Pillar)

Shifts in societal preferences that contribute to global economic integration.

Public Policy (Convergence Pillar)

Government responses to real-world problems that facilitate economic interdependence.

Marketization

The core institutional driver of the architecture of economic globalization.

Gross Domestic Product (GDP)

The monetary value of all finished goods and services made within a country during a specific period, used to estimate economy size and growth rate.

Trade Surplus

A condition in the balance of trade where Exports are greater than Imports.

Trade Deficit

A condition in the balance of trade where Imports are greater than Exports.

International Monetary Fund (IMF)

A global lender of last resort that imposes stabilization programs during balance of payments crises.

IBRD (International Bank for Reconstruction and Development)

A branch of the World Bank Group that provides loans to middle-income governments.

IDA (International Development Association)

A branch of the World Bank Group that provides interest-free loans to the poorest nations.

IFC (International Finance Corporation)

A branch of the World Bank Group that provides private sector equity.

ICSID (International Centre for Settlement of Investment Disputes)

A branch of the World Bank Group dedicated to dispute mediation.

MIGA (Multilateral Investment Guarantee Agency)

A branch of the World Bank Group that provides political risk insurance.

GATT/WTO

The pillar of the global economic order focused on liberalization through multilateral trade negotiations and the reduction of tariffs and non-tariff barriers.

Foreign Direct Investment (FDI)

The physical investment or acquisition of corporate entities in a foreign country.

International Companies

Importers and exporters that do not engage in Foreign Direct Investment, focus on the home market, and maintain high centralization.

Multinational Companies (MNCs)

Companies with Foreign Direct Investment in limited areas that customize their product strategy to local preferences.

Transnational Companies (TNCs)

Companies with Foreign Direct Investment in dozens of countries that lack a dominant headquarters and distribute decision-making globally.

Global Companies

Corporate entities with significant Foreign Direct Investment in multiple countries that use homogenized marketing tailored to local markets.

The Silk Road

A historical trade route spanning from $130\text{ BCE}$ to $1453\text{ CE}$.

The Galleon Trade

Established in $1571$, this trade route yielded profits of $100\text{--}300\%$ by exchanging Chinese silk, perfumes, and Indian cotton for Mexican silver.

Mercantilism

An economic theory from the $16\text{th--}18\text{th}$ Century aiming to hoard gold and increase trade surpluses at the expense of other nations via high tariffs.

The Gold Standard

A system lasting from $1867$ to the $1970\text{s}$ where currencies were fixed to gold to reduce inflation and stabilize exchange rates.

Global Keynesianism

The theory that economic crises occur when money is not being spent, requiring governments to reinvigorate demand.

Bretton Woods System

A system created at a $1944$ UN Conference that tied global currencies to the US Dollar, which itself was tied to gold.

Nixon Shock

The $1971$ event where the United States removed the dollar from the gold standard.

Fiat Currency

Money as an idea, whose value is determined by relative cost rather than being backed by a physical commodity.

Stagflation

An economic paradox characterized by stagnant economic growth (high unemployment) and sharp inflation (rising prices).

Neoliberalism

An economic premise that government intervention distorts markets, advocating for the replacement of state intervention with free-market capitalism.

Fiscal Discipline

A component of the Washington Consensus involving minimal government spending to reduce national debt.

Privatization

The transfer of state-controlled services, such as water, power, and transit, to private owners for profit.

Global Capitalism

A system where the means of production are controlled by private individuals and corporations, and labor and manufacturing operate on a global stage.

2007-2008 Global Financial Crisis

A systemic failure sparked by the removal of banking restrictions (deregulation) and the bankruptcy of Lehman Brothers.

Protectionist Hypocrisy

A friction in globalization where developed countries push for free trade while protecting their own primary products from developing-world imports.

Race to the Bottom

A phenomenon where developing nations lower labor standards, tax laws, and environmental protections to attract Foreign Direct Investment.

Distributed Ledger Technology (DLT)

A digital ledger duplicated and distributed across a network, using an immutable cryptographic signature (hash) to potentially remove financial middlemen.