Task 2

Question 1

Hot capital

Answer 1

short term of investing in which investors move their money between financial markets to tae advantage of interest rate fluctuations

Question 2

state

Answer 2

organization which controls the population occupying a definite territory

Question 3

sovereignty + territoriality

Answer 3

political environment in which each state exists is by necessary one which in shares with a plurality of states similar in nature - relation between states are not structures and monitored by a higher power because the state is the higher power

Question 4

Nation state (Modern state)

Answer 4

1. Nationhood - commonalities shared by the population of a given state on grounds other than political
2. Democratic legitimation - state claims not only to complement and uphold politically the other, pre-political commonalities that bind its people together but is also to seen in people its own constituency and ultimate seat of all powers that it exercises
3. State and law - law add to the two social functions it performs everywhere: allocation of control over the goods and repression of anti social conducts
4. Bureaucracy - attempt to reduce contrast between state as unitary entity

Question 5

The Trilemma

Answer 5

Hyper-globalization - limit globalization to have democratic legitimacy at home

Democracy - restrict democracy in the interest of minimizing international transaction cost

Sovereignty - limit national sovereignty in favor of a globalized democracy

Golden straitjacket - the only policies provided by the governments are those that reinforce the smooth functioning of the international market

Question 6

Give up nation state - keeping democracy

Answer 6

Solution - global governance - National constitution, federal government, federal judiciary and large number of nationwide regulatory agencies ensure that markets are truly national despite many differences in regulatory and taxation practices among individual states

Model of European Union - diminution of national sovereignty

Question 7

What led to the Bretton woods agreement

Answer 7

compromise that a allows for national power but also democratic power - giving up hyper globalization

It gave the dollar a stable value pegged to the gold - money and market stability

Question 8

Why did Bretton woods break down

Answer 8

The Bretton woods compromise was largely abandoned in the 1980s as the liberalization of capital flows gathered speed and trade agreements began to reach behind national borders

Key reason for Bretton woods collapse was the inflationary monetary policy that was inappropriate for the key currency country of the system - USA violated the fiscal and monetary policies rules after the 1965