Global Economy Essays

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Part 1. Identification
1. The “irreconcilable trinity” - also known as the Unholy Trinity; meaning you can have at most two of the three irreconcilable goals which are national autonomy, fixed exchange rates, or free open capital movements (Gilpin, pgs. 122-123).
2. “Chimerica” – Simply put it is a symbiotic relationship between the United States and China. Both parties benefited from this union until the financial crisis (Ferguson, pgs. 335-33).
3. 1934 RTAA (Reciprocal Trade Agreements Act) – gave the president the ability to negotiate foreign trade agreements for three years without approval from Congress for changes up to fifty cents (Ravenhill, pgs. 14 & 118).
4. Seigniorage – is the provider of the currency in an economy which has benefits of increased political and economic autonomy, increased income, but also has to pay other countries for “holding assets in their currency” (Gilpin, pg. 120). For a long time the United States has been the able to enjoy many benefits from being the transactions and reserve currency (Gilpin, pg. 60).
5. Beggar-Thy-Neighbor – A decrease in a country’s standards or “deregulatory arbitrage” (Ravenhill, pg. 319). When a country lessens the value of their currency to increase the demand of the goods produced domestically and decrease imports. (Eichengreen, pg. 89).
6. “Embedded Liberalism” – Embedded liberalism was a compromise made after 1945 between governments to safeguard their domestic economic goals, attempt to maintain full employment and open their market for the restoration of international trade and investment to other nations (Midterm). The word embedding in embedded liberalism allowed the government of nations to temporarily “opt out” of their agreement if the provision of the international trade and finance rules threatened their domestic goals (Ravenhill, pg. 15).
7. Dependency Theory – The rules of the game disadvantage poor countries (periphery) through deliberate utter exploitation by rich industrialized countries (core). A spin off of Marxian like Lennon revision of Marx and the ability of greedy capitalist countries to offset their internal convictions by gobbling up the world (Notes).
8. Triffin Dilemma - The Triffin Dilemma of the 1950’s stated that the BWS design would run into a confidence problem. It would work as long as the amount of Untied States Dollars (USD) in circulation did not go above a certain amount, but at some point the amount of dollars will exceed its maximum amount and the liquidity of dollars exceeded its value in gold which occurred in 1964 (Notes).
9. Race to the Bottom” – Also known as the Delaware effect. Though it would be help for states to work together to benefit both of them, they would rather be first due to incentives to cut corporate taxes, labor policies, decrease regulations and environmental laws (Ravenhill, pg. 73).
10. Washington Consensus – Very cookie cutter neoliberal approach of 10 specific economic policies with a phonebook of rules on what to do and how to do it (Notes). It was a deregulation of markets, allows cross-border trade and investments and gave the big players a “global level playing field” (Ravenhill, pg. 373).
11. Gramscian Hegemony – Stresses that in order to maintain class power there needs to be cultural hegemony (Staniland Handout, pg.160).

Part 2. Short Essay
Question 1
Shares of companies have been bought and sold for over 400 years, and since the beginning we have seen many financial bubbles. Hyman Minsky considers the theory of financial crisis, “financial instability” (Gilpin, pg. 137). Financial instability is the thought of a market eventually crashing, thus should never be considered perfect nor indefinitely in a boom stage. The term “displacement” should be a constant warning sign for investors and workers in the financial market. Minsky considers displacement signs to be, “the start of a war, a bumper or failed crop, or innovation and diffusion of an important new
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