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total value of goods and services produced by an economy in a specific time period


International Financial Institutions (IFIs)

the international monetary fund and the world bank


comparative advantage

the competitive strength of an economy that derives from the capacity of its firms in various sectors. Whether government intervention can enhance an economy's competitive advantage remains a matter of considerable controversy.

Potential gains from trade for individuals due to differences in factor endowments


Most-favoured nation principle (MFN)

the principle of non-discrimination, enshrined in Article 1 of the GATT/WTO, that members should give all other members the most favorable trade treatment they offer to any member.


gold standard

a monetary system in which the money supply is linked directly to the country's holdings of gold; citizens are usually entitled to exchange banknotes for gold. An international gold standard is an international monetary system in which the value of all currencies is set in terms of a unit gold, and settlement of trade imbalances occurs through the transfer of gold reserves.


embedded liberalism

a concept put forth by John Gerard Ruggie, to capture the compromise in poset-war economic regimes between liberalization and the pursuit of domestic social and political objectives



policy coordination by three or more states on the basis of principles that specify appropriate conduct for a class of actions.


Bretton Woods

the New Hampshire village in which the Mount Washington Hotel is located, and the site of the 1944 United Nations Monetary and Financial Conference. This conference marked the birth of the International Monetary Fund and the World Bank. Shorthand for post-war international financial regimes.



a political orientation that came to prominence in the 1980's, celebrating the desirability of market-based economic institutions and willing to use exposure to market ideology as a means of disciplining the population. It is often closely associated with policies of privatization and the retreat of the state from prominence in economic affairs.



economic policies based on the premise that national wealth and power are best served by the state acting to increase exports and to run a balance of trade surplus (originally with the intention of accumulating precious metals)


International Monetary Fund (IMF)

an institution of 188 members as of late 2013, providing extensive technical assistance and short-term flows of stabilization finance to any of those members experiencing temporarily distressed finances


free trade

originally an ideology and latterly an institutionalized system of unrestricted commercial activity, whereby countries are increasingly disqualified from using legal mechanisms to artificially lower the price which domestic consumers pay for home produced goods relative to the price at which overseas producers can supply them


Heckscher-Ohlin Model

Countries will export those commodities that are intensive in the factor (land, labor, capital) in which they are best endowed



provisions enabling countries with problems in specific sector or their economy more generally to seek temporary exemptions from some of their obligations in the trade regime


Foreign direct investment (FDI)

the act of raising money to allow a firm from one country to establish new productive capacity in another country


hegemonic stability

argument that liberal (open) international economic regimes are associated with the presence of a dominant state.


free market economies

those countries generally espousing the ideology that all economic decision making, if possible, should be left to the commercial del interest of the private sector, and who try to design their economic institutions according to this doctrine of government non-interference.


adjustable peg

a form of international monetary system in which governments are permitted to change their currencies' exchange rates, normally fixed in value against other currencies



policy coordination by three or more states on the basis of principles that specify appropriate conduct for a class of actions.



the profit that results from the difference between the cost of producing and distributing obey and the face value of that money. Originally, the difference between the face value of a coin and the cost of the metal that went into that coin.