CH.12 - WORLD POST-BRETTON WOODS (GLOBALIZATION ADVANCES) Flashcards Preview

international political economy > CH.12 - WORLD POST-BRETTON WOODS (GLOBALIZATION ADVANCES) > Flashcards

Flashcards in CH.12 - WORLD POST-BRETTON WOODS (GLOBALIZATION ADVANCES) Deck (23)
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1
Q

capital markets

A

p.483

2
Q

capital mobility hypothesis

A

A conjecture that posits an inverse relationship between the mobility of capital and the policy autonomy of government or less mobile assets of production

3
Q

contagion network

A

A web of transactions and connections that transmits opportunities, dislocations, and risks across societies

4
Q

currency control board

A

An extremely narrow version of a peg, which tightens the trading band of a currency and limits a government’s latitude for responding to political pressures to manipulate money supply and the exchange rate

5
Q

disintermediation

A

A process in which economic enterprises shift their borrowing away from commercial banks, which guarantee a specific rate of return to savers and intermediate their risks, and toward securitized financial instruments such as bonds and equities, in which the investor accepts the full risk of the loan to a borrower but also can reap a greater reward

6
Q

European Monetary System (EMS)

A

A collective peg monetary arrangement formed in 1979 that targeted ±2.25 percent bands for members of the peg, but allowed some weaker-currency states (such as Italy) a wider, transitional band of 6 percent

7
Q

European Snake

A

A collective-currency peg that constrained the trading range of European currencies; it was created in response to fears about post–Bretton Woods flotation and designed to limit exchange-rate volatility

8
Q

exchange-rate mechanism (ERM)

A

The mechanism that determines the value of one currency versus another and provides a means of adjustment in the balance-of-payments mechanism

9
Q

financial futures markets

A

Markets in which traders purchase financial instruments in a particular currency and lock in the price of that currency at some future date; such betting on the future value of currencies allows hedging against exchange-rate risk and supplies insurance mechanisms to manage currency risk

10
Q

Fleming-Mundell Model

A

A theory that predicts an inherent tension between currency stability, capital mobility, and monetary policy autonomy

11
Q

foreign direct investment (FDI)

A

Investment in control of productive facilities overseas—usually defined by an investment that amounts to control of 10 percent or more of a company’s equity

12
Q

global capital

A

Capital that can move from one nation to another

13
Q

hard currency

A

Any monetary unit that can readily be used and accepted in international transactions; such currencies are desirable because they are considered likely to hold their value over time and so present relatively little currency risk to the parties of an international transaction

14
Q

letter of conditionality

A

A letter, signed by a government, that offers commitments to address systemic problems in its domestic economy in exchange for financial assistance from an international organization such as the IMF

15
Q

Maastricht Criteria

A

A set of macroeconomic convergence goals, established by the Maastricht Treaty (1991), which European governments had to meet by 1997, as they moved to Stage III of European Monetary Union

16
Q

money markets

A

Markets that involve the trading of financial instruments that have a maturity of less than one year; these short-term obligations include trading in currencies, currency futures, and options

17
Q

neoliberalism

A

A shift away from Keynesian strategies such as fiscal policies, domestic social protections, controls on capital movements, and collective international manage­ment, to place greater emphasis on markets to condition, reward, or penalize economic activity

18
Q

petrodollars

A

The revenues that accrue to oil-producing states from the sale of oil; much of this revenue is recycled into the global economy either through increased consumption or through bank deposits in Western banks located in the large financial centers, which then loan those to borrowers

19
Q

securitization

A

The transformation and packaging of financial liabilities into financial instruments such as bonds and stocks that can be sold in financial markets

20
Q

seignorage

A

An overexpansion of money supply by issuing more currency so that a government can pay its bills and finance its programs, which creates an inflation tax

21
Q

systemic factors

A

Forces that reside outside the domain of any specific national arena and operate across all national arenas

22
Q

unholy trinity

A

A framework that describes the relationship between exchange-rate policy, monetary policy, and capital mobility; governments can obtain two of the three compo­nents of the trinity, but not all three at the same time

23
Q

Washington Consensus

A

A policy agenda that places great emphasis upon the corrective pressures of market discipline and seeks to reduce government regulation and intervention in the economy by promoting economic openness in trade and capital movements, liberalization of financial markets, fiscal policies that lead to balanced budgets, anti-inflationary monetary policies, stability in exchange-rate relations, expansion of private enterprise, and a reduction in state-owned enterprises