Exam 2 Flashcards
the study of how politics and economies are related and how their relationship shapes the balance between freedom and equality.
political economy
goods provided or secured by the state that are available for society and indivisible
public goods
People act for good of the collective; may hurt individually but beneficial collectively
logic of collective action
An institution that controls how much money is flowing through the economy as well as how much it costs to borrow money
central bank
an increase in the overall prices in the economy when demand outstrips supply
inflation
a period of falling prices and values for goods, services, investments and wages
deflation
roles or orders that set the boundaries of a given procedure
regulations
taxes on imported goods
tariffs
: policies and regulations used to limit imports through methods other than taxation
nontariff barriers
the actual relationship between political and economic institutions in a society and the policies and outcomes they want to create- ability to enforce contracts
political economic systems
very limited state involvement in the economy (securing property right); Adam Smith
liberalism
private property and market forces, but more cautious than liberalism. Concerned about high inequality; Eduard Bernstein
social democracy
private property and markets a dorm of power that inevitably leads to one person or group gaining control over others; Karl Marx
communism
national economic power paramount, and domestic economy is an instrument to generate power; Friedrich List (Singapore a current example)
mercantilism
he total market value of all goods and services produces by a country over a period of one year
Gross Domestic Product
GDP divided by population
GDP per capita
estimates the buying power of income in each country by comparing similar costs, such as food and housing, but using US prices as benchmark
Purchasing Power Parity
measures the amount of economic inequality in a society
Gini Index
index accounting for income, health, and education
Human Development Index
stop buying goods from rich countries, create on own
import substitution
the notion that resources flow from a “periphery” of poor and underdeveloped states to a “core” of wealthy states, enriching the latter at the expense of the former
Dependency Theory
a set of 10 economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions such as the International Monetary Fund (IMF), World Bank, and the US Treasury Department
Washington Consensus
a system in which a state extends its power to directly control territory, resources, and people beyond its borders
imperialism
an imperialist system of physically occupying a foreign territory using military force, business, or settlers
colonialism
theory of development in which the existence of natural resources in a given state is a barrier to modernization and democracy
resource curse
the rules of the game in a society; an organization or activity that is self-perpetuating and valued for its own sake.
institutions
institutions that are formally codified in official documents such as constitutions or laws
formal institutions
how govt is to function; eliminates uncertainty
operating manuals