8 Trade and the Global Political Economy Free Online FlashCards

What does international political economy study?

International political economy studies how political power and economic activity shape one another across borders.

What is comparative advantage?

Comparative advantage means specializing in goods produced at relatively lower opportunity cost and trading for others. This can benefit a country even if another country is more productive in every sector.

What is a global value chain?

A global value chain is a production network in which different stages of a product’s design, manufacture, and distribution take place in multiple countries.

What role does the WTO play in international trade?

The World Trade Organization provides a forum for negotiating trade rules and addressing disputes. Its rules can make trade more predictable, although states continue to disagree over trade policy.

How can trade support economic development?

Trade can support development by expanding markets, creating jobs, encouraging investment, and providing access to inputs, knowledge, and technology.

Who may gain and who may lose from trade?

Exporting firms and expanding sectors may benefit, as can consumers through lower prices and wider selection. Workers and communities facing import competition may lose jobs or bargaining power, especially when alternatives are scarce.

What policies can help spread the gains from trade?

Retraining, job-search support, income protection, education, investment in affected regions, labor standards, and progressive taxation can reduce hardship and help more people share in gains from economic change.

What concerns shape mercantilist approaches to trade?

Mercantilist or economic-nationalist approaches treat strategic industries, import dependence, and trade balances as national-interest concerns. They may favor tariffs, subsidies, or domestic production to reduce vulnerabilities.

What inequality do structuralist approaches examine?

Structuralist approaches examine unequal power in the world economy, including whether poorer economies remain in low-value activities while wealthier states and multinational firms control high-value production and technology.

What makes economic interdependence asymmetric?

Interdependence is asymmetric when actors have unequal alternatives, market power, or control over essential technologies. Those with more leverage may better withstand disruptions and influence the terms of exchange.

Why might a country process commodities before exporting them?

Exporting unprocessed commodities can earn foreign exchange but leave a country exposed to volatile world prices. Processing them and developing related industries can help capture more value domestically.

How can domestic policy shape trade’s effects on living standards?

Education, labor protections, industrial policy, taxation, social insurance, and public investment influence whether trade-related opportunities improve living standards broadly.