geog 216 notes 3 Flashcards
(200 cards)
1
Q
whats is the paradox of plenty (aka what) and what are the symptoms
A
aka resource curse, symptoms: resource wealth, slow growth, high poverty, poor governance, weak states, revolution & conflict
2
Q
what happens to growth rate as you increase oil & mineral merchandise exports
A
as oil & mineral exports increase growth rate goes down
3
Q
what is and what are the 3 things that happen with economic windfall
A
boom and bust!
1. deindustrialization
2. overvalued exchange rates & inflation
3. withering agricultural sector
e.g. spain in 18thC with gold influx
4
Q
what are the resource characteristics
A
- point source (easily appropriable, in one specific area)
- owned by state
- low production cost: high value
5
Q
what are the 3 causes of the resource curse?
A
- income volatility
- rent seeking, patronage, & living off the land
- dutch disease
6
Q
what is income volatility & what are the three causes
A
prices rise and fall leading to a lack of stability –>
1. commodity price variation
2. rate of extraction
3. timing of receipt
7
Q
what is commodity price variation w example
A
spikes and drops in commodities (effects state money) –> look to oil prices, big rise and drop all in a few months around 2008
8
Q
what is the rate of extraction
A
easily accessible reserves get depleted, receipts from the industry fall over time
9
Q
what is the timing of receipts
A
state may restrict taxes/royalties to encourage commodity business, timing of payment can lead to income volatility
payments are tied to price,
price volatility increases with declining extraction rates as well
example: chad
10
Q
what are the consequences of income volatility
A
- cycles of economic boom and bust: swings of econ well being; govt spending (myb not productively but on white elephants like monuments) during booms
- borrowing money during boom times: cycle of revenue, expenditure, and debt
(less growth, hard to pay off debts)
e.g. veneuzala & mexico
11
Q
what is rent seeking, patronage, and “living off the land” about?
A
not about presence of resources, but how rents flow from resources to shape political, and economic behaviour
12
Q
what are economic rents
A
profits, amount of money between extracting processing and selling: process/extract 1 barrel of oil for 5$ sell for 75$, rent is 70$
13
Q
what is the political economy of rent seeking behavior
A
everyone wants in, so politicians focus on capturing rents from resources:
extreme cases lead to insurgency’s,
also: spending more on militaries, corruption, bribery, favoritism,
14
Q
what is 1 consequence of rent seeking/patronage/living off the land
A
overconsumption: natural capital “easy money” promote consuming it
e.g. Venezuela has super cheap gas, avoid a revolt if bread and oil prices are down
15
Q
what is another consequence of rent seeking/patronage/living off the land?
A
underinvestment: dont invest in human capital, technology, education etc –> only focus on resources
skilled workforce not needed when wealth is in the ground
16
Q
what is the final consequence of rent seeking/patronage/living off the land?
A
taxation: dont need to collect taxes when wealth is in the ground, politicians only responsible for those working with resources –> no accountability from state = weak, oppressive, non democratic states
17
Q
what is dutch disease
A
1960s: gas fields found off netherlands, seemed like a great thing, led to negative consequences
18
Q
what are the symptoms of dutch disease
A
- booming resource sector: ppl move into tradeable good sector- can work w resources or w construction
- inflation and currency appreciation (overvalued): increase imports = stronger dollar, too many exports = dollar goes down
- withering manufacture/agriculture sector
19
Q
what are the boom dynamics: tradeable vs non tradeables & boom vs non boom
A
boom vs non boom sector: some sectors experience econ booms e.g. oil
tradeable vs nontradeable goods: oil vs real estate
20
Q
what is the resource allocation effect
A
capital and labor reallocated into the booming sector
21
Q
what is the spending effect
A
higher wages from resource boom means more spending on goods, often foreign goods (due to strong dollar) or non tradeables (real estate)
–> distorts economy, spending more but not locally
–> overvalued currency means vulnerable to price drops in sector
22
Q
relate the 2 effects to the case of amazons rubber boom
A
late 19thC early 20thC is largest econ boom latin america has ever seen
–> wealth unimaginable, ppl create houses, stores, operas, everything in the jungle where the rubber trees were
–> rubber goes bust in 1910, all that investment is useless & sunk costs, no resource created same rents as rubber
Lesson: investment in only one sector = fragile economy
23
Q
what is the relationship between food supply and demand
A
inelastic, hard for adjustments between supply and demand (demand increases supply struggles to keep up)
24
Q
what are the 4 causes of food spikes
A
- oil prices: agriculture relies on oil, oil spike in price reflected in food spike
- adverse weather: e.g. 2000s drought in australia, frost in florida OJ
- trade shocks: small proportion of food is intl traded, very sensitive (shock means govt tends not to export, & pop hoards/panic buys)
- covid pandemic: disrupted supply chain
25
competitiveness of biofuels
biofuel increase due to oil price spike leads to corn and sugar used for ethanol / biofuel
15% of us corn used for ethanol in 2006, 40% by 2012
26
what are the consequences (3) of spikes and who is most greatly impacted
due to engels law --> biggest impact on poor ppl in devel countries
1. undernourishment & impoverishment: 915 million to 1 billion undernourished after 2008 food price spike
2. food riots & revolts: nightmare for politicians, civil unrest, social fabric threatened (arab spring)
3. greater policy attention: understand & help food system (positive)
27
drivers of food demand
1. population increase
2. dietary transitions
3. changes in food retailing
28
what are the dietary transitions driving food demand
incomes rise ppl change what they want
1. shift from tubers & coarse grains (cosava) to grains & cereals
2. shift from plant based to animal based
--> "livestock revolution" happening in China rn
29
what are the changes in food retailing
from traditional wet markets to supermarkets: latin america 1990s liberalizes food retail
--> leads to more affordable food, better quality & safety BUT unhealthy food and increased obesity
30
what are the 3 sources of growth in agriculture production
1. new land (extensification)
2. input intensification
3. increased total factor productivity (TFP): ratio of total commodity output to total inputs used in production (use inputs more efficiently - dont j increase)
e.g. precision agriculture using drones
31
what are the trends in sources of agricultural growth
extensification falling, irrigation stays the same, input intensification huge in 60s-80s, TFP is main story from 90s-2000s
TFP is black box --> need to understand what works and why
32
what are yield gaps
difference between whats produced & what could be produced
e.g. farmer in africa gets 1/10 of yield than delta region farmer
33
what is the available land vs yield gaps example
subsaharan africa: rwanda uses all available land, madagascar & malawi could increase land use
regardless of using land, both benefit from intensification & TFP
34
what are the causes of yield gaps and how much is put into solving them
tech restraints, limited markets, high input cost & low returns
--> poor ppl are just as innovative, but bigger risks with increasing output for them
--> geog related issue, complex hard to solve
32 billion $ a year into how to solve
35
what are the concerns for climate change and crop yields
rising temps reduce productivity, crop-damaging weather, reduced water, shortened growing systems
--> can be very bad (cereals could drop 4-6%)
36
why is climate change a mixed effect for agriculture
more co2 means increased plant growth/productivity, but the higher temps means lower productivity
--> dont wait to find out, also think of importance of distribution impacts (who will suffer and where)
37
what is the importance of dietary changes
we could feed a lot more ppl if we were all plant based --> livestock eats 55% of worlds coarse grains, takes up 75% of worlds agri land
38
what are the calories delivered per hectore
only 10% of calories produced are delivered to food system in US, Canada, areas of Europe due to animal/dairy diet
subsaharan africa & southeast asia uses almost all calories
--> less calorie productivity due to shift towards american diet
39
how much of food is wasted
30-40% wasted, 1 billion tonnes, costs 750 billion $, produced 3.3 tonnes of greenhouse gases
40
what is food waste like in developing vs industrialized countries
developing: most losses at farm level (40-50%)
industrialized: most losses in homes or retail (consumer level, 50%)
food wasted in north america is enough to feed all of subsaharan africa
--> huge consequences, need to reuse recycle and recover food
41
what is world agricultural trade like
most crops arent traded,
HIC subsidization of domestic agriculture --> overproduction
LIC underinvestment --> underproduction
tarrifs quotas & quality standards = less world food trade (protectionist)
freer food trade = lower prices, but threatens food sovereignty (Doha 2000 conference --> no solution)
42
what is LSLA and how big is it/where is it focused
large scale land acquisitions, 30 million hectores, mostly global south --> focus on africa also russia, central america, southeast asia, east europe
43
what are the major land acquisition trends
major spike after 2008 great recession but tapering off now, land aquired vs land put into production (space growing over time) --> buy and hold strategy,
44
how is increased land aquisition seen in the global south
as a win-win, investors get 5-8% income yields, local farmers can make more by renting the land over owning it, increased food, development, economic growth for global south
45
is LSLA new? what are the differences (5)
not new: since colonial era
1. different size & scale
2. new players: China Malaysia, UAE, Cyprus, India and corporations
3. disillusionment with small holder farming
4. VI in agribusiness
5. flex crops (for both food & energy, biofuels) increase
46
47
what are the 5 drivers of global land aquisition
1. high food prices - spiking since 2008
2. competing land uses
3. low returns on other investments
4. land as a good investment
5. speculation
48
what is a growing perception about land in the global community and what are competing land uses
growing perception of land scarcity in global community (1/3 land left) --> debate if we are really running out
competing uses e.g. food vs biofuel vs rubber vs carbon market
49
what are low returns on other investments & why is land a good investment
great recession led to low returns on other investments,
land: historically good hedge against inflation
-- source of income & appreciation
-- returns not correlated w equity market (stock market doesnt effect)
-- farmland prices rising
50
what does speculation mean for GLA
price spread leads to speculation
netherlands is more expensive than ghana
higher land prices = lower risk
lower land prices = high risk
returns vary --> location is important
51
what are some things the global farmland value index shows
4x increase in value
huge increase in central europe prices
value gone up in absolute terms, but also compared to other investments e.g. oil, gold, etc
farmland gone up more than residential & commercial land
52
how are land acquisitions measured globally & what are the media vs inventory views
ntl govts dont keep good inventories --> shift to NGO inventories
-- Intl Land Coalition "Land Matrix" tracks aquisitions, finds media overestimates
e.g. reported 10 million congo deal which was acc 100k hectores
--> due to deal changes, land use differences, size issues etc
53
what does the global land trade network show
land importers (buying land) & exporters (selling land)
Africa is focus for LSLA --> global north buying from global south mainly
some countries e.g. US both buy and sell
54
what are land aquisitions used for (with %s)
1. food production (34%)
2. non food crops (26%)
3. flex crops (23%)
4. multiple uses (17%)
55
what are national actors in LSLA and what is their importance
have capital to invest in own country
-- urban elite, civil people, little farming experience, little media attention
bought through diaspora --> remittances bought from abroad
largest # of land deals, (not largest area)
--> more LA in Mozambique, cambodia, nigeria etc than foreign
56
who are regional actors and whats the role of the gulf states
regional actors invest in own region, e.g. Malawi in south Africa
Gulf states only countries motivated more by food, due to dependence on declining cereal production, & role of food in politics (arab spring)
57
who are global foreign investors in LSLA who are the main ones, and whats canadas role
foreign investment: through private companies, hedge funds, sovereign wealth funds, and pension funds
top countries: US, Malaysia, China, Cyprus, Brazil, Singapore, Hong-Kong, Netherlands etc
Canada: not major player (15 in list) still happening, small companies in asia, farmland in USA
58
what are mega farms w example
really big farms e.g. brazil soy 190k hector farm --> consolidation of agriculture
59
why shift to large scale farms reason 1
1. economies of producing & processing: economies of scale
---> more efficient machinery and processing: needs vertical integration
--> demanding product standards: food safety/organic certification
60
why shift to large scale farms reason 2
2. easier to get credit/insurance
--> quickly diversity
--> new crops need investment, lack of local labor needs machinery (which needs capital)
61
why shift to large scale farms reason 3
3. public policy bias: large farms = more political power
policies focused on cheap land, capital, and R&D
62
what are the 4 primary concerns of LSLA
1. rich countries take land from poor vulnerable ppl (often informal land titles, poor governance, dispossesed)
2. food security in food insecure regions: non food crops (biofuels) dont feed locals
3. employment opportunities limited: loss of smallholder farming, not hiring small local farmers (exception of palm oil)
4. environment: water grabbing
63
what is the future of LSLA and what are 4 measures taken
trying to slow LSLA through:
1. land purchase restrictions
2. strengthen land governance/ better manage land investments
3. guidelines for better practices
4. level playing field for family smallholder farmers
64
what is the postcovid future of LSLA
predicting increased tarrifs restricting trade will lead to inflation period where LSLA appeals to investors
recovery (land), inflation (land), stagflation (gold)
65
what do tropical forests serve as
home to indigenous, large stores of resources & land, 80% extensified land,
66
what are the main regions of deforestation, how much land is lost, and what type of land is focused
Brazil Andes & Atlantic Coast of South America
2100 square km lost per year in South America
mostly in-tact forests, now focus shifts to shrubbery
67
describe the arc of deforestation in brazil and what are secondary forests
more reforestation is happening now, but 2/3 of returning forests are secondary (of lower quality)
68
what is the general forest transition
forest area decreased through deforestation then increases again due to reforestation--> closely reliant on rural to urban development changes, increases global net gain of forests
e.g. borreal forests in US
69
what are proximate vs underlying drivers of deforestation
proximate: man cutting down tree with ax
underlying: why did man cut down tree & move family to frontier
complicated 2 conflicting explanations
70
what is the environmental explanation (5 drivers)
5 classic drivers
1. overpopulation
2. innapropriate tech (e.g. slash & burn)
3. ill-defined property rights
4. incomplete markets (cost unrelated to land, carbon emissions
5. weak institutions
western based idea
71
what is the environmental explanations solution?
control pop growth, ban slash & burn, land use planning, education, privatize land, improve market integration
72
what did the opening up of the amazon lead to
1960s-1980s
prior: livestock production very profitable in isolated regions, pasture life short, limited investment
1984 military coup brazil opened up amazon --> "land without people for people without land", but ignored indigenous
73
what are the 5 reasons why cattle
1. frontier political ideology: occupy to keep other countries out
2. cheap/urban food: needed to quell social unrest
3. non traditional exports: cattle provides revenue, investment + infrastructure
4. vent for surplus: place to invest new capital (from elites who luv military)
5. solve inflation: cattle stores wealth, land= hedge for inflation
74
what were the incentives (how) for cattle
targeted social/economic problems --> tax exemptions, land grant, subsidized credit
cattle secured land --> land appreciates --> more mineral access
cattle = proximate cause, subsidies = underlying
75
what is export oriented deforestation
during 1990s-2000s amazon becomes net-exporter
cattle sector export doubles
soy replaced anchovies market brazil becomes largest soy producer by 05'
leads to large land loss, but post 1995 begins to work towards sustainability
76
what is falling deforestation in Brazil a result of (4)
1. rise of civil society: brazil democracy (1985), NGO pressure
2. export orientation: pressure points & vulnerability from key suppliers
3. climate change mitigation: govt sets targets for lower carbon emissions & less deforestation
- norwegian forest initiative
-bolsta floresta
4. bolsonaro regime: 2019-22 govt change to focus on environment
77
what is the moratorium on?
soy (2006) & beef (2009) cant sell beef/soy on recently deforested land
78
what is the political economy of deforestation (7)
the environ explanation doesnt apply to amazon, instead look to socio-economic structure of society:
1. distribution of wealth
2. opportunities for wealth accumulation
3. role of state
4. rise of civil society
5. prevailing cost-price environment
6. currency devaluation
7. intl contexts, connections, & markets
79
who are the rainforest peasants
2 main groups: amerindians & folk (metis) people
live along amazon river and tributeries
use traditional resource practices & sell on market
poor in income & assets
80
how diverse is the amazon
20k tree species, 40k plant species, 3300 fish
81
what are the 5 myths about the rain forest people
1. forest people are generalists
2. rain forest communities are egalitarian
3. traditional forest use is sustainable
4. rain forest is primary safety net
5. human imprint on landscape is small
6. poorest are most vulnerable to environmental change
82
are forest people generalists?
belief: backwards ppl/peasants "little bit of everything" pluriactivity
reality: high level of product specialization, village level specialization, specialization is geo contingent, very important resources crucial to understand for careful targeting of conservation & development
83
are rainforest communities egalitarian?
belief: small communities, few local authorities, no obvious class or status distinction --> peasant ethos
reality: access to land, access to labor & access to seeds all uneven
84
what is access to land like for rainforest people
claim land by clearing it, absent land markets, land inequality driven by initial endowments land inequality decreased through trading/inheritance & diversification
85
what is access to labor like for rainforest people
household/kinship labor & by own self
cooperative labor (minga) paid labor through food and drink
network highly unequal
86
what is access to seeds like for rainforest people
exchange seeds informally, access to seeds is constrined, network is less dense than labor, but also uneqaul
87
is traditional forest use sustainable?
belief: indigenous practices = model for sustainability & path out of poverty
reality: charcoal (seen as bad) and palm fiber (seen as good) acc the opposite, charcoal is extracted sustainably & palm fiber has moral hazard of stealing
--->not due to group identity or traditional practice but:
Type of product, circumstances of harvesting, harvester behavior
Conservation & development initiatives need to focus on micro foundational logic of resource issue
88
is the rainforest the primary safety net?
belief: protecting rainforests protects rainforest people
reality: ucayali river and maranon river flooded & illness "shocks" leads to people going fishing (if river is closeby)
type of shock influences the coping strategy
89
is the human imprint on the landscape small from forest people
belief: the pristine myth
reality: archaeological evidence (prehistory forest change), and anthropogenic (terra preta- black soils) reflect human use
ucayali river was changed course with simple tech, not as pristine as thought
90
are the poorest the most vulnerable to environmental change
belief: most physically/economically/socially vulnerable (true but...)
reality: environmental shocks can open windows of opportunity for poorest, break out of path dependency
Endogenous institutional change critical for enabling poor to cope with climate-change shocks → give poor space & enable
91
what happened during hurricane mitch
80% rice, 2/3 communities destroyed,
outcome: poor's land holding increased 250%, land became more equal
land tenure reform
hybrid blazing system, bottom up, viral
92
what is the historical background of intl trade policy (early 20thC)
high levels of trade in early 20thC (bilateral- country by country basis)
93
what changes in intl trade during the 1930s
great depression leads to protectionist policies that worsened the slowdown (stagnation)
Smooth Hawley Tariff Act: imposed in 1930s US put tariffs on 20k goods -- retaliation by trading partners
94
what changed in intl trade in 1945
post WW2 Bretton Woods agreement to reshape world trade & intl finance
-stabilize & rebuild war damaged economy
-- IMF, intl bank for recontruction & devel (now world bank)
- no formal trade org but agreement on general tariffs
95
what is the general agreement on trade and tariffs
1947 geneva, 23 countries (mostly HIC also devel like China)
- countries reduce trade barriers through multilateral negotiations & wont raise them unilaterally (binding)
operates through negotiation rounds (9 since 1947) sets agenda of binding tarriffs and admin reforms (liberalization)
96
what is UNCTAD and how did it change the GATT
previous to 1960 GATT focused on trade between developed countries
UNCTAD in 1964 focuses shift to developing countries access (mostly for communist "most-favored nation" geopolitical reasons)
97
how did the GATT evolve, and what did it lead to
of countries signing onto GATT increase over time
tariff % goes down over time (40% 1940s - <10% 1990s)
98
what are the 3 major rounds of the GATT
kennedy round: first blanket approach to tariff reductions
tokyo: also about non-tariff barriers (protection for cultural industries, subsidies) --> first GATT tackling subsidy issues like japan vs canada
uruguay: incluce services, intellectual property, and institutional change
--> creating of WTO
99
from GATT to WTO
end of uruguay round, WTO =fully fledged intl organization
- includes rules on trade of services
-defined intellectual property
- dispute settlement mechanism (tribunal), e.g. Canada vs Brazil airline dispute
100
what happened during the Doha round
began in 2001, never concludes (stalemate/dead)
goal: reform trading system, reduce govt agri support, (NGOs began getting involved)
-Cancun 2003 & Geneva 2008: deal breaks down as devel countries backtrack
-Bali 2013 & Nairobi 2015 didnt lead to anything substantial or keep commitments to poorest members
101
what are regional trade agreements
attempts to liberalize trade over smaller groups of countries (preferential) 3 types - FTA, customs union, common markets
102
what is a free trade agreement
least comprehensive
allows for tariff free trade among members, but countries decide about policies w non members
--> uniquely non-binding
e.g. NAFTA
103
what is a customs union
a FTA where member countries also agree to establish common trade policy with the rest of the world
--> more binding
e.g. Mercosur: argentina, brazil, paraguay, uruguay
104
what is a common market
customs unions w free movement of labor & capital among members (common currency)
e.g. EU
105
What is NAFTA
North American Free Trade Alliance
guided by national treatment where firms follow same rules & regulations
under dispute settlement mechanism imposition of counteravailing duties subject to panel of review by experts
main objective when Mexico joined in 1994 was eliminate tariffs by 1999
106
what was NAFTA's main objective and what happened
main objective when Mexico joined in 1994 was eliminate tariffs by 1999
--> now certain trade restrictions are grandfathered while others are sunset clauses (supposed to fade away over time
some goods subject to non-tariff restrictions (cultural industries in canada)
107
how did NAFTA work out and what is the future
worked out as expected, industry restructured in direction of greater export orientation in all 3 countries
question inequality with wages and job displacement
NAFTA 2.0, donald trump pulled out July 2020: auto sector, supply management, patents from 7-10 years (effects tech transfer)
108
what is the comprehensive economic & trade agreement
linked canada to the EU
negotiations from 2004 - 2014, signed oct 2016 came into force sept 2017
98% of tariffs between canada & eu to be eliminated
could eventually surpass NAFTA (but NAFTA still biggest)
109
what is the trans-pacific-partnership (TPP)
12 pacific rim countries
--> geopolitical containment measure to slow down chinas growing influence
negotiations began 2008, signed feb 2016
- lower trade/investment barriers, create dispute-settlement mechanism for signing countries
would have been largest FTA (40% world trade) but nov 2016 trump withdraws us --> huge impact
110
what is the comprehensive and progressive agreement for trans pacific partnership (CTPP)
canada + 10 remaining TPP countries
-evolves from TPP in effect by 2018
--> 2/3 of provisions stipulated in TPP
111
what is the regional comprehensive economic partnership (RCEP)
15 countries (ASEAN + regional partners)
nov 15 2020, largest FTA in world rn (<30% world trade)
--> rise of chinas influence (geopolitical shift)
--> question if US will reingage with CTPP
112
what are stock markets, what are their functions, and what are some components of them
where stocks (company shares) are bought and sold
function: establish value of company shares
-common vs preferred stocks (do you get say in company)
-bonds (payout fixed interest rate)
- derivatives, market securities, futures & options
113
why do companies issue stocks
unlike debt (must be repaid) stock capital doesnt have to be returned, so companies issue stocks for capital to fund their company & growth
114
what was the stock market like pre 1970
nation & ogliopolisitic
- mutual corporations --> not for profit, mutual organization of brokers together owning shares
115
what changes in the stock market post 1970
post fordism globalization of financial system
- increased deregulation & competition between exchanges
-more MNCs (crosstrade to pool capital + increase visibility)
- new financial instruments (new tech, virtual trading floor)
--> harder for regulatory frameworks, hypermobility of capital flows
116
what is the 24 hour clock
stock markets open in one area while another one closes so 24 hr cycle of stock exchanges
- markets watched abroad 24 hrs
- because of TSC!!
117
what are the top 11 stock exchanges by market capitalization (and what is market capitalization)
market capitalization: value of all market shares traded in a SE
1. NYSE
2. NASDAQ: on the rise (tech focused)
3. Shanghai SE: 1/3 big China stocks
4. EuroNext: new used to be 4 seperate (lisbon, brussels, paris, amsterdam)
5. Tokyo: dropping over time
6. Shenzen: 2/3 China
7. Hong Kong: 3/3 China
8. NSE of India: growing
9. London SE: slowing
10. Saudi SE: growing
11. TMX (Toronto SE): slowing
118
how big is the nyse, what is the dow jones industrial average
25-28 trillion --> biggest SE
DJIA: key index --> meaning it tracks value of 30 blue chip (biggest) companies traded on NYSE
--> companies like Mcdonalds, Boeing, Proctor & Gamble
119
when did the financial crisis happen and what were the peaks and flows leading up to it (as tracked by the DJIA)
90s experiences big growth (.com boom)
2000 peaks, 2001 .com bubble bursts
--> bear market: stocks dumped
2004-2006 increase w real estate market
14k by 2007 then fall 2007 housing bubble pops and 2008-2009 huge crisis with slow recovery
120
how was the recovery since the great recession
2016 starts to grow rapidly again
2020 theres a signifigant drop but a K shaped recession
--> markets rapidly recover, middle class benefits less from this recovery
markets now more volatile --> increase in 2024 market
121
how big was the recession and what was the main trigger
second biggest recession since great depression
trigger: collapse of US housing market: caused by sub-prime lending & easy credit conditions
122
what are the other casual factors for the recession
1. increased debt + diminished savings
2. deregulation of banks & finance (increase risk taking behavior)
3. growing world trade imbalances
4. commodity bubble (e.g. oil increases from 50$ a barrel in 2007 to 150$ by 2008)
123
what defines a recession and how was this recession a global contagion
2 consecutive quarters of economic decline (contraction of GDP values)
north/ south america, europe, russia, east asia all saw recession
many areas on brink, even areas growing (china & india) split growth rate in half
124
do we need a geographical perspective on the recession? what are the two perspectives
hyperglobalizer perspective: flat world due to TSC, globalized finance means geo is irrelevent
Martin: argues world isnt flat, stock markets location still matters
--> different major cities of operation
--> different banking structures & regulatory frameworks
(e.g. branch banking systems, mortgage finance systems, regulatory regimes & arrangements)
125
what is glocalization and what caused it
glocalization: local & global processes become inextricably interwoven in dialectical movements of globalization & localization
1. local financial circuits delocalized (stretched, globalized)
2. global financial circuits localized (compressed, deglobalized)
126
what have the house price bubbles been recently (how many & when) and what is different with 2006
70s, 80s, & 90s all saw house bubbles 2006 different in price scale variation and more global feel
--> due to globalized local mortgage lending --> shift in models
127
what is the traditional mortgage lending model
locally originate & locally hold
front end: home buyer goes to branch, gets mortgage from bank, repays over time
back end: local bank gets funds from savings of deposits of all of banks customers
--> how mortgages worked until 1980s
128
what is the new mortgage lending model
locally originate and globally distribute
front end hasnt changed much
back end: financial instruments become more global & complex
--> structures investment vehicles emerge: allow banks to repackage mortgages to investors
129
what are predatory lending practices
banks take higher risk customers for mortgages hoping for bigger returns
--> because they arent borrowing from their own customers anymore, they can increase risk at global level
130
what is the state level geo of the recession
most states dont see fluctuations
florida, nevada, california hit hardest (also mass, colombia, new york)
cities hit different too: san diego, miami, LA --> saw steepest contractions
GEO matters!!
131
what did the great recession lead to for home owners
ppl couldnt afford to renew mortgages so they went into forclosure, due to negative equity
-- mortgages were higher than value of homes after price correction
12-13 million households affected
132
what changed post great recession and how does it suggest a new MOSR/ROA
1. US nationalization (shot gun) marriages of firms to save what they could
2. US bailout (troubled asset relief plan) designed to take toxic loans off balance sheets
3. Euro Central bank & Eurocrisis bailout packages --> london effected (brexit)
on going financial expansion/turmoil/volatility means new rounds of regulation on predatory lending practices
133
how is there a possible industrial divide post recession?
more regulation in the financial environment --> debate still ongoing about the effects
134
how do we put a value on natural resource & the environment
view nature as a receiver of outputs
question how to balance benefits & consequences of exploitation of natural resources
135
does does the valuation of nature work in the conventional economic approach
price is set for units of given natural commodity through market exchange
local markets: local farmer market
global markets: prices determined globally
136
what are the main global natural resource markets
agriculture: Chicago Mercantile Exchange (wheat & pork) and Dali Exchange (China - soy & palm oil)
metals: London metal Exchange (industrial metals - iron ore, copper)
energy: New York Mercantile Exchange - NYMEX (oil, precious metals like gold, energy related goods)
137
what are the two things trading at commodity exchanges can be for
immediate purchase: aka spot trades --> price determined on spot
futures: buyers & sellers agree today on price for natural commodity delivered in the future
--> important for agri e.g. oranges in winter
or for jet fuel
138
what are the benefits and downsides to commodity exchanges
highlighy efficient mechanism to set an equillibrium price
do not account for broader environmental impacts or extraction or resource use (dont consider environmental cost)
139
what are the criticisms of the conventional approach
binary conceptualization of nature and society
1. anything not quantifiable (enviro costs) are neglected or underplayed
2. economy is seen as seperate to natural world, (nature only had meaning if it effects econ processes)
- treat nature as object: exogenous input to production
140
what are the demands we place on nature & how do we better incorporate nature
demands: both as provider of inputs (resources) and receiver of outputs (byproducts, waste/losses)
input output process steps (extraction, production, manufacturing, consumption) all have outputs on enviro (e.g. pollution)
--consider both of natures roles
141
what is the commodification of nature
harnessing & incorporation of nature for economic purposes
valuing nature based on use values (food, shelter etc) or exchange values (assigned monetary values)
142
what are the 5 factors that determine history & geography of natures commodification
1. tech & scientific knowledge: discoveries & new applications (e.g. uranium, lithium, solar panel metals)
2. changes in economic circumstances
3. location of raw materials
4. post extraction geography (e.g. fishing transport)
5. investment requirements + role of govt (undervalue public goods typically)
143
what are the 4 models of natures 'ownership'
1. communal access: use resource cant own e.g. fishing in ocean
2. state ownership & state exploitation: benefits shared amongst citizens e.g. hydroelectricity
3. state ownership & private exploitation: liscensing feed paid to extract resource e.g. logging industry
4. private ownership & private exploitation: reap profits of resource activities
144
what trend is occuring in regards to ownership
with neoliberalism and post fordism we see an increase in private ownership
--> seen in private water: move away from community control & industrial activity to corporate control & mergers of big companies
145
what is the commodification of environmental degradation
side/after effects of economic processes --> how can enviro protection be commodified?
!! put a price on degradation
2 ways: markets for trading emissions credits & growing certification programs in resource industries
146
what are the markets for trading emissions
1. kyoto protocol (1997): attempt to establish global carbon credit trading system via quotas
--> ntl govts allocate emissions permits (ERUs) to companies, surplus of which can be traded to other exceeding allocations
2. EU emissions trading system: 2005, most advanced market (11k factories
--> cap & trade principle
3. UN COPs: paris agreement 2015, limit global warming
147
what is a certification program
used to demonstrate environmentally friendly nature of products
-Forest Stewardship Council: 1993, best known example --> products get label if they come from well-managed forests
148
who are the leading carbon emissions by country
1. china (27%, 9.8 billion tonnes)
2. US (15% 5.3 billion tonnes)
3. EU (9.8% 3.5 billion tonnes)
per capita basis: middle east, Canada, saudi, US
global unevenness of carbon, hear about in COP
149
what are the inequalities in Co2 emissions
champagne glass: poorest 50% = 8% of emissions
- top 10% = 50% of emissions
- top 0.1% = 77x average Co2 emissions
150
what do we do to bring nature back to life and what is the actor theory network
couple two nature environment interfaces
-- face concerns of growing enviro inequality
actor network theory: find relationships between different actors ('things' & 'concepts')
--> think about objects as part of social network (endogenous vs exogenous)
151
how has the world distribution of cities changed
1. rapid growth of large cities: e.g. 1950 only 2 cities >10million, by 2015 theres 29
2. large urban cities representing larger % of worlds total pop
--> tipping point: 2006 went from 49-50% of world pop in urban areas (became majority)
152
what does delineation have to do with cities
ties into planetary urbanization, where boundaries are in urban areas
pearl river delta, north eastern US, blue banana --> all urban corridors difficult to find boundaries of
153
what does new spatial configuration mean
post fordism & globalization led to new spatial configurations (local becomes more important than ever) --> 2 forces (localization & globalization)
154
what are the 2 geog forces of new spatial configuration
1. local/regional processes: economic activities cluster to benefit from agglomeration (marshall) & key clusters form as localized industrial processes (new industrial spaces)
2. global processes: MNCs, financial flows, trade flows, new global institutions
155
describe glocalization and its role in new spatial configurations
dialectical movement (tension) in 2 forces of localization & globalization
rescaling: local-global scaler dynamics emerging as configurations in lieu of nation-state (where & how decisions are made)
--> NIS not isolated, large world cities --> connected via global networks
- urban areas represent new force of global economy
156
what is the world city hypothesis and who first conceptualized it
why are certain cities disproportionately large in economic influence (nodes/pistons of economic engine
first by Peter Hall (1966) who asks why
157
what are the 3 things peter hall emphasizes as important
1. trade relations
2. political power (e.g. washington, Beijing)
3. knowledge creation & dissemination
--> all essential ingredients to study world cities
--> but data hard to come by & measure
158
who were 2 people adding to world city hypothesis and what did they do
friedmann & wolff (1982 & 1986)
identify countries based on degree of emeshment into world economic activity
--> consider notions of extensity, intensity, velocity
159
what do friedmann & wolff say we should look to and what do they develop
MNCs role as key agents of change -->
world cities as command & control centers (where economic decisions are made, and where business services are located) --> where are biggest MNC headquarters located
- develop first empirical ranking of world cities (small sample - 30 cities)
160
what is the GaWC
globalization and world cities research network (1990s, longborough uni, UK)
- construction of detailed inventory of world cities using new means to gather data & measure extent of networks
161
what is the assumption GaWC makes, and how does this lead to key economic activities
post fordism means key economic activity is corporate services/finance because they serve as command & control functions
--> 4 services targetted: accounting, ad, bank/finance, legal
dispersion of production vs cocentration of advanced producer services (manage & organize dispersion)
162
how does the GaWC gather data & rank cities
ranked according to "world-cityness" from data gathered through magazines, trade directories etc --> # of corporate service providers in each of 4 sectors
163
what are the GaWC rankings with examples
prime/alpha: 5+ firms, 3 points e.g. London, NYC, Paris, Tokyo, Chicago, Hong Kong, LA, Singapore
major/beta: 3-4 firms, 2 points e.g. San fran, Toronto, San paulo, Sydney, Zurich
minor/gamma: 1-2 firms, 1 point e.g. amsterdam, Boston, Mtl,
--then lower category of evidence of world city formation
164
what are other ways the GaWC identifies world cities
identify by circular network of connectedness
--> zoom down at micro level (e.g. by city - Londons connections & how those transactions happen)
--> macro regional look: world cities influence across large continental regions
165
what does the latest GaWC 2024 ranking show
London & NYC top 2 once again
sample size has expanded: new cities emerge not in top 20 in 2000
--e.g. pearl river delta (hong-kong, shenzhen- hangzhou) & beijing & dubai
- paris & tokyo slipping
-mumbai & sydney growing
166
what is planetary urbanization
big debate in social sciences: twin forces reshaping the world economies transactions & infrastructure
last 30 years have seen socio-spatial transformations (brenner & schmid 2001)
--> new scales of urbanization, regionalization of urban processes, wilderness transformed
167
what is the old idea of urbanization
binary conceptualization of heartland (core,urban) and hinterland (rural, periphery)
168
how do we see "urban" in our world now
worldwide condition where local-global, political-economic relations are emmeshed
169
what is income inequality and its 2 extremes
income inequality measures disparity between % of population & % of income that population receives (as disparity decreases inequality increases)
maximum: one person holds all wealth
minimum: every person holds the same amount of wealth
170
why does inequality matter (sens view, & when the topic emerged & issues)
"central economic issue related to globalization is that of inequality" - Sen 2002
late 90s resurgence of topic
national issues:
1. negative effects on economic growth
2. inequality leads to political instability
3. negative social/health outcomes (obesity, crime etc)
global issues:
1. greater awareness of inequality across countries can cause conflict
2. migration allowance may decrease (more migration today)
171
intl v.s. global/world inequality
international inequality: between nations (GDP per capita differences)
global/world inequality: between individuals regardless of nation
172
what are milanovich's 3 concepts
concept 1: unweighted international inequality - doesnt account for population size, use GDI per capita, country level, measure in ntl accounts, use PPP for conversion issues, ignores within country inequality
concept 2: weighted intl inequality - same as concept 1 except it considers population size (e.g. chinas weight is 20%, very big pop)
concept 3: global/world inequality- look at disposable income, individual observation, collect micro data (household surveys like canadian census), convert through PPP, controls within country inequality
173
what are the 2 ways to measure inequality
1. gini coefficient: 0 < gini < 1 (can be %) 0 is complete equality, 1 is maximum inequality --> sensitive to transfer of incomes in middle of distribution
2. theil index: measure of entropy, 0 = perfect equality, theres no upper bound --> more sensitive to tail of distribution (e.g. top 1%), can look at between v.s. within group indicators
174
what are the historical patterns of concept 1 inequality like
from 1820-2000, industrial rev saw huge spike between country inequality, by great depression it plateaus, WW1 & 2 see huge spikes, then developmental state led to a decrease, and the neoliberal state saw it rise slightly but stagnate
175
what are the historical patterns of concept 2 inequality like
steady increase with spikes up until post ww2, then it stabilizes again
1970s & 80s neoliberal state saw a decrease because big countries like China & India were growing rapidly
176
what are contemporary patterns of inequality like (1952-2014)
concept 1 & 2 (without china) seeing increase and peak late 90s before steadily going down
concept 2 with china sees bigger decrease and earlier peak
concept 3 sees increase until 2005 or so then a decline
177
what is the inequality transition
19thC industrial revolution boom led to increased inequality between countries
by late 20thC several emerging economies industrializing faster then rich countries
--> are poorer countries catching up now? (intl convergence)
178
what is the elephant curve
measure real income growth % against% of global income distribution
- bottom 5%: poverty trap, no growth
- 15-65%: biggest rise in incomes - middle class in developing countries (elephants back)
- 65-90%: middle class in HIC have seen biggest decline in growth
- top 5%: trunk of elephant, huge growth for global elite
179
what are worrying facts in PPP terms
top 5% of pop controls 1/3 worlds income
(make what poorest 5% make in a year in 2 days)
- concept 3 inequality is very high (gini over 50) and direction of change isnt clear
- other side of coin: within country inequality growing and/or remains high
180
what does the theil index show about between vs within country inequality
between country inequality is higher than before even though its decrease - now its rising, but within country is still higher
--> multiple causes (no smoking gun): intl trade, migration, aging pop, education differences etc
181
what does the gini and income shares show about within country inequality
gini: south america, south african countries all show high levels of within country inequality, scandinavian countries are gold standard (today seeing more inequality, more like canada now)
income shares: 1913 top 1% holds 20% of income, drops post ww2 (period of great compression, golden age fordism), 1970s post fordism huge increase, now seeing levels higher than pre 1913
182
what is within country inequality like amongst OECD countries
3/4 OECD countries see similar rise of inequality
canada has had second fastest inequality growth out of all OECD countries
183
what can we do globally to decrease inequality
1. change intl trading systems that are biased against poor countries (fischer)
2. remove agricultural subsidies and allow freer trade in key sectors (as suggested in failed doha round)
3. change WTO rules for less focus on intellectual property (increase tech transfer) and financial liberalization
4. move from loans to grants
5. special programs for africa (like aids and export help)
6. create a global taxes/transfers system (piketty) new idea controversial but allow for redistribution from HIC to LIC
184
what is the future of global inequality (2 forces)
1. equalizing force: (between country inequality) seeing rapid economic expansion e.g. china & india meaning poor but populous countries are catching up
2. disequalizing force: increased national (within country) inequality seen particularily in the rural-urban cap (in places like China & India) but also in HIC
--> has calmed over covid but now increasing
185
what are the pre covid trends in globalization
globalization is slowing down: trade/GDP ratio reflects great recession puts breaks on growth (seesaw pattern after)
--import intensity: deep integration slowing down, hasnt recovered
--> ppl are more critical of globalization
increased within country inequality & discontentment (e.g. brexit, populism, trump, us-mexico-china trade wars)
186
what is rodriks political trilemma
2/3 only for world economy (tension)
1. democracy
2. national sovereignty
3. global integration
187
how did covid 19 further add pressure
1. deglobalization pressures: movement & capital slows down, inward turn & restructuring of manufacturing activities (e.g. comp for PPE)
2. human toll: uneven global impact, US Japan germany has most cases but not worst effected
188
what was the unprecedented collapse in GDP and what was the shape
OECD GDP Q4-2019 to Q2-2020 = huge contraction average OECD (15%), Canada at 13%, world average 12-13%
V shaped recovery: down and recover rapidly
K shaped recovery: top portion K (financial markets) quickly recovered, bottom portion K (middle class people) recovered slowly
189
how was canada effected by covid
december 2019 - march 2020 = 17-18% drop in real GDP
imports & exports drop starkly
V shaped --> by 2023 we are back to pre covid seesaw
worry: consumer price index (inflated prices) not come down until very recently --> could see similar smooth hall 1930s prolonging of inflation
190
look to montreal to explain the demographics that were most effected
in montreal higher income areas faced less covid deaths (negative relationship)
also high relationship between visible minorities & deaths
--> also a relationship between women and higher deaths
why?: service based workers mainly still had to go to work and have face to face contact
191
give an example of inter regional inequalities and how they effect covid
canada has 20% gap between rural and urban populations with high speed internet
25% of nova scotians dont have internet
when school was online this leads to further educational gaps --> lasting impact
192
will covid cause a big city exodus --> what are the opportunities for cities & long term effects
not likely to cause large deurbanization
long term: social scarring - fear of crowded spaces, working remotely (not everyone can), changes to urban form
opportunities: build back better, agglomeration economies, demog tranformation to younger more diverse cities, bigger cities better for the environment and sustainability
193
what was poverty like before covid and post covid
1990-2017 saw big decrease in global poverty rates (36%-9%)
--> decreased # of poor: 2000 million - 750 million
because of globalization and pro poor growth/devel
post covid poverty rate: 2017 = 9.2, continues down to 7.5
--> 2 predicted trends in covid, downside & baseline, baseline ended up happening and rates increased to 9.1 then dropped again to 8.9
194
what was the geography of post covid poverty like
south asia & subsaharan africa faced 87% of additional poor
MIC contained 4/5 of new poor
--> emerging middle class most effected, not extreme poor from before
195
what was covid like in peru
MIC, first to lockdown, longest lockdown, highest morality rate (5x rate in canada, 220,000 dead)
2 waves: biggest impact based on age and region --> hospital system collapsed in certain regions, others less effected
196
how did poverty change from covid in peru
huge drop in real GDP then rebound (financial recovery not economic or social)
6.5 million jobs lost, higher increase in poverty rates with total poverty not extreme poverty
urban areas: e.g. lima, faced 14%-25% poverty rate increase
197
what areas were more effected by covid in peru
rural areas: less effected --> remoteness, livlihood, living conditions, healthier
urban areas: locus of outbreak --> informal sector employment (70% workforce), wet food markets (40-50% vendors had covid), overcrowded housing, less healthy, banking services caused spread (govt cheques to rural areas)
198
who are the new poor?
Middle income countries: urbanites, employed in service sectors --> educated, skilled, emerging middle class
most vulnerable and effected are middle income ppl and countries (emerging middle class) who slip back into poverty
199
what to do for the future
target policy measures for new poor
--> address damage done to healthcare, education, employment (offer social protection, insurance, assistance to new poor)
promote pro-poor economic growth (target inflation, tax reform, infrastructure investment)
200
what did covid do summary
set out new global landscape conditions
--> concern isnt pandemic anymore but effects like geopolitics, tariffs, inflation etc
