GLBL 210 Notes: 2/29/16-3/2/16
GLBL 210 Notes: 2/29/16-3/2/16 GLBL 210
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This 4 page Class Notes was uploaded by Hadley Ashford on Wednesday March 2, 2016. The Class Notes belongs to GLBL 210 at University of North Carolina - Chapel Hill taught by Jonathan Weiler in Spring 2016. Since its upload, it has received 21 views. For similar materials see Global Issues in Global Studies at University of North Carolina - Chapel Hill.
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Date Created: 03/02/16
GLBL 210 Notes 2/29/16-3/2/16 2/29/16 - GDP equation: GDP= C+I+G+ (X-I) o C= consumption o I= investment (first I) o G= government spending o X= exports o I= imports (second I) o Generally used measure of prosperity Evaluation of well-being Guides World Bank and IMF policies - Criticisms of GDP: o Calculator adds, but doesn’t subtract Ex. if much of society smokes, GDP will increase because more people buying cigarettes and healthcare GDP only accounts for added GDP instead of other variables/consequences Must ask what money is being spent on, not just that it is being spend o Doesn’t take into account quality of life Ex. Europeans makes less GDP per capita than US because work less (more days off, more vacation time)- difficult to determine better situation - PPP (purchasing power parities): comparison of values of different currencies o Ask question of what can be bought with money earned (factors in globalized markets) - Measures of well-being: o MDG (Millennium Development Goals): takes into account health, life expectancy, etc. o HDI (Human Development Index) o GPI (Genuine Progress Indicator): most variables not accounted for with GDP Resource depletion Pollution Housework Non-market transactions Unemployment/underemployment Equality Quality of infrastructure- how long it lasts - Kuznets’ Curve: relationship between income and inequality o Used in debates of how countries can become more successful Traditional societies more equal because no one has anything Take-off/drive to maturity (1900’s US) unequal because more options for advancement Age of consumption (current US) more equal because rise in living standard for most o Equality increased with increased income because adopt more policies of greater distribution of wealth Caused by deliberate intervention of governments Goes along with Keynes’ idea of society’s levelling off after age of consumption - Argument that foundation of prosperity lies in economic growth o Related to Maslow’s Hierarchy of Needs Need basic needs met before able to worry about other things - Bhagwati argues that redistributive policies without sufficient funds are counterproductive o Key to poverty alleviation is focus on increased economic activity through neoliberal capitalism o Does not eliminate need for policies addressing social and poverty concerns Poverty not alleviated solely by economic growth Economic growth is means to an end - Data shows that poverty has been declining over past 50 years o In total number impoverished people and percentage of population - Average infant mortality been declining as well - Much of global poverty reduction from China o Must ask what China has been doing to be successful o Also must ask what other countries need to do to emulate China’s success 3/2/16 Midterm notes: need to know definition and larger significance - Don’t need to know “selective globalization” Class notes: - Ha-Joon Chang: o Kicking away the ladder: countries find unique way to success and attempt to prevent others from doing same Specifically refers to history of free trade: world powers didn’t follow principles of free trade to achieve success, but falsely encouraged others to do so to ensure underdevelopment o Argues that free trade is not a good way to achieve success in this world order o US and Britain (and other currently successful world powers) relied on protectionism of national industries o Japanese car industry= global powerhouse in 1980’s o World powers worried about Chinese threat to current world order because they have a strong economy o Japan used protective measures to support car industry- reason for Japanese success o US stole a lot of intellectual property in order to promote success True for many world powers - Infant industry protection: o Alexander Hamilton= first American leader to think about US economic development Championed infant industry protection Necessary for global competition Contrary to traditional narrative of free trade - Free trade can be problematic because misses what free trade really is o Trade is not really ever free because it is negotiated and dynamic o Free trade implies equal playing field, but isn’t and hasn’t ever been the case IMF and World Bank: Washington Consensus and SAP’s (structural adjustment programs) - Jamaica and structural adjustment programs o SAP’s implemented in 1970’s-1980’s o Poor countries go to IMF and World Bank as last resort because have conditionalities and cross-conditionalities Private banks may not take poor countries on because view them as too much of risk o Cross-conditionalities: IMF and World Bank technically separate but are interconnected Sometimes both give conditions for loan o Reasoning behind SAP’s: IMF/World Bank don’t want to lend money if nothing is going to change and create same need in future SAP’s= attempt to change structure of poor countries and prevent future problems o SAF conditions: Free trade Less government spending Global market-orientation - Stanley Fischer’s neoliberal program: o Remove trade barrier policies o Integration in world economy o Fix/change economic structures that cause economic problems o Attend to fundamentals Economies need to have good business climate Labor is relatively cheap Little labor unrest, less union power Keep down business costs o Reduce government spending Come to IMF/World Bank because don’t have enough money Governments generally spending money on education, welfare, healthcare - IMF: always headed by European o Originally used to help countries with trade deficits o Lend money to help economies back on feet o Increase exports, decrease imports o Purpose: promote international trade expansion and stableness, short- term lending - World Bank: always headed by American o Originally used to help get Europe back up after WWII o Organizes, plans, and implements development projects, also is more inclined to provide long-term loans IMF can’t do that, but is usually involved with funding or coordination - IMF and World Bank not always in agreement - Criticism of IMF/World Bank: o Doesn’t represent everyone equally: only reflects interests of wealthy countries More votes for those with stronger economies (specifically for IMF) US basically has veto power because has 16.8% of vote, policy changes usually need 85% of vote - Power of ideologies shown in way developing countries choose to conduct policies after dealing with IMF/World Bank o Ex. Jamaica unable to come to another agreement with IMF/World Bank, but still chose to pursue what IMF/World Bank would have required them to do because became ingrained in society - One of common criticisms of fairness of global economy involves agriculture o Developing countries encouraged to embrace free trade, but US subsidizes agricultural sector in major way - President Clinton apologizes for ruining Haitian rice farming by encouraging free trade o Clinton recognizes that US subsidizes agriculture while encouraging others (helps US and hurts others) Recognizes that neoliberal policies of free trade failed everywhere
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