GPE Mid term

• 1. Trade - Good and Services (WTO)
• 2. Monetary - Exchange rates, (Central Bank, IMF)
• 3. Development Finance - World Bank

• 1980s
• 1. Launch of WWW
• 2. Global Expansion of English Language

• 2010
• 1. Rise of the BRCs
• 2. US no longer the dominant global leader

• 1. Market Potential (expanding or declining)
• 2. Strengths / Weaknesses of your firm vs. competitors
• 3. Barginning power of supplier
• 4. Barginning power of buyer

The best interest of all society is served by individual choices. The invisible hand

No longer successful strategy to be a jack of all trades.

Instead focus on core competencies

Globalization

Cooperation

Sovereignty at Bay

The strategic advantage one business entity has over its rivals within a competitive industry.

Theory: proposed by Michael Porter

Political - Economic

State - Market

Government - Business

Provides the context for the political and economic interaction between states and the market

The integration of regional economies, societies and cultures through a global network which includes communication, transportation and trade.

Defined by David Ricaro

Free trade increases efficiency and has the potential to make everyone better off. Focusing on one product to maintain a comparative advantage (price, quality, etc.)

When a nation states independence and autonomy is eclipsed by the growth of international economies.

Not as self-contained as they once were.

• 1. Driving force of globalization
• 2. Increase profits
• 3. Access human and natural resources
• 4. Economices of Scale
• 5. Bypass increasing government ristrictions
• 6. Investment incentives and competitions
• 7. Exploit what is in the air (clustering)
• 8. 24 hour capacity (Follow the Sun)
• 9. Manufacture at peak capacity

The idea/theory that the international system is more stable with a hegemon

Dominance and leadership of one nation over others.

• Stability / Diplomacy
• Regime of free trade
• Global organizations (IMF, WTO)
• Currency for trade
• Lender of last resort
• Military overstretched

espouses free trade, free access to markets and laissey-faire economics

Thinkers: Adam Smith and David Ricardo

nations are best off when the state and market are joined in a partnership. The state protects domister firms which become richer and in turn increase state power.

Nations act in their own interest.

A natural phenomenon that guides free markets and capitalism through competition for scarce resouces.

Adam Smith

• 1. Entry control and foreign direct investment
• 2. Ownership and equity restrictions
• 3. Local content requirements
• 4. Export performance requirements
• 5. Import controls
• 6. Builing and land ownership considerations
• 7. Intellectual property protection
• 8. Use of indeginous labor

A phrase that represents a hallowed out economy.

• 1. No industrial base
• 2. A service economy

• 1. Import quotas
• 2. Marketing and ad restrictions
• 3. Import licensing requirements
• 4. Customs procedures
• 5. Product quality standards
• 6. Safety and health requirements

Hightech = high value, high profit

lowtech = low value, and low profit margins

• Greed
• Exploitation
• Contradictions
• Class consciousness
• Social Revolution

Focus on structualism and class awareness

Economics drives eveything

• Actors = classes
• Dynamics = exploitation

Power comes from the bourgoise owning the means of production.

Functions as an international organization that fights poverty by offering advice and training, loans / devlopment assistance.

Considered the most elegant theory in economics.

Increase in production efficiency, lowers the coste per unit produced.

Gives companies access to larger markets, more geographical reach.

Oversees the IM System, monitors financial and economic policies of its members

Provides loans to hel countries restore macroeconomic stability.

• 1. War
• 2. Hegemon
• 3. Multipolar
• 4. Begin again

Whe two arties are in an agreement but each party could gain from acting contrary to the agreement.

Strategies to create comparative advantage.

It is the governmets job to smooth out the bumps of the business cycle.

• Internention would include:
• 1) Government spending and tax breaks in order to stimulate the economy.

2) Government spending cuts and tax hikes in good times to curb inflation.

a meeting / conference held at the height of WWII where 44 allied nations met.

• Outcome:
• 1) Formation of the IMF
• 2) Formation of the International bank for reconstruction and development
• 3) Introducition of an adjustable pegged foreign exchange rate system.

Oversees the monetary system for a nation.