International Political Economy Notes. Part 1
International Political Economy Notes. Part 1 PSC 103-001
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This 3 page Class Notes was uploaded by Marina Alexandro on Monday March 21, 2016. The Class Notes belongs to PSC 103-001 at Northern Kentucky University taught by Kimberly Weir in Fall 2015. Since its upload, it has received 37 views. For similar materials see International Politics - AH in Political Science at Northern Kentucky University.
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Date Created: 03/21/16
INTERNATIONAL POLITICAL ECONOMY NOTES. PART 1. •3 Areas: 1 Monetary Systems (IMS) 2 Trade System (ITS) 3 Investment & Finance (IT & IF) 1. MONETARY SYSTEMS A. Currency Exchange: Int’l Monetary Fund (IMF) •created to bring stabilityprevent Global Depression •all countries pay a sum to have backup money •when they pay a country in trouble, pay in sums instead of one big amount preventing massive spending all at once •in Global South, many jobs are in govn’t lack of private sector jobs money stays in one place when IMF helps, rules are applied such as cutting govn’tal jobs Side Terms: GDP Gross Domestic Product measures of capita per country. GDP per capita per person. B. Countries Rated by Economy: #1 U.S. #2 China #3 Japan #4 Germany. C. IMS: Interdependent •countries are connected: income from exports; currency value supply & demand influences the value; interest rates influence by status of other countries. •currency exchanges: 2013 $5.3 Trillion exchanged (14.5 Billion/per day). •top exchange cities: #1 London #2 NYC #3 Hong Kong #4 Singapore #5 Tokyo D. IMS is Globally North Dominated •forced/created by colonization adopted Gold Standard currency backed up by gold •post WW2 US goals to prevent another depression, something needed to be done spread capitalism •CHANGE #1: U.S. created IGOs Int’l Global Organization Bretton Woods Conference 1944 created 2 organizations: 1. Int’l Monetary Fund (IMF) for financial stability; GN dominated because more welloff countries contribute more monetarily; therefore, GN countries have more votes. 2. World Bank (WB) development and reconstruction of countries post WW2 and develop former colonies. •CHANGE #2: Purchasing Power Party (PPP) worth of money all over the world (GN currency can buy more). Big Mac Index way to compare currency value see how much in each currency Big Mac costs & see how it compares & see how valued/undervalued currency is. This is a good comparison because same ingredients are used all over the world. Example: U.S.—> Big Mac cost $4.93; so can buy 11,028 Big Macs with an average income; can buy 26,616 Big Macs if were to travel to India with the same income. India —> Big Mac cost $1.90; so can buy 895 Big Macs with an average income; can buy 345 Big Macs if were to travel to the U.S. and buy them here. Result: India’s currency is undervalued. •Europe Ties to Compete: Treaty of Rome 1952. EU 1992 expansion to 28 members. Adoption of Euro 1999 before, each country used own currency (19 members at the beginning). Global Recession 2008 Iceland Banking Crash creates Euro crisis in 2010.
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