Bretton Woods Institutions and Trade Issues

The International Monetary Fund (IMF) is a global organization that aims to stabilize international monetary arrangements and promote international trade by rebuilding markets for goods and capital.

The World Bank focuses on helping developing countries rebuild their domestic economies, particularly after major economic crises or disasters.

The World Trade Organization (WTO) is an international organization that regulates international trade and sets rules for international commerce, helping to reduce trade barriers and promote free trade.

The terms of trade refer to the ratio of a country's export prices to its import prices. A decline in the terms of trade means that a country has to export more goods to purchase the same amount of imports, reducing its income.

The Prebisch-Singer hypothesis argues that over time, the prices of primary products (like agricultural commodities) tend to fall relative to the prices of manufactured goods, creating a disadvantage for developing countries that rely heavily on exporting primary products.

The theory that countries should specialize in producing and exporting goods and services that they can produce relatively more efficiently than other countries, leading to mutual gains from trade.

A model explaining international trade patterns based on countries' relative abundance of factors of production (e.g., labor, capital) and the differing factor intensities required for different goods.

The theory that increased trade leads to a more efficient allocation of resources globally, resulting in higher overall output and potentially higher living standards for all participating countries.

The idea that trade can lead to convergence in factor prices (e.g., wages, capital costs) between countries due to increased competition and the flow of resources.

The theory that focuses on the role of advanced factors (e.g., knowledge, infrastructure) in driving comparative advantage and economic development, emphasizing the need for innovation and upgrading.

The argument that opening world markets to developing countries allows them to utilize underutilized resources and produce more goods for export, potentially using previously unused land and labour resources to create an export surplus.

A strategy for economic development that emphasizes domestic production and reducing reliance on imports through the use of tariffs and other protectionist measures.

A strategy for economic development that focuses on promoting exports, often through policies that enhance competitiveness and support export-oriented industries.

A tariff that is calculated as a percentage of the value of the imported good. This is the stated, or nominal, tariff rate.

A tariff that considers the impact of all tariffs on the value added in production, taking into account tariff protection on intermediate inputs. It provides a more accurate measure of the actual protection provided to domestic industries.

South Korea's economic model was heavily influenced by government intervention in industrial sectors, particularly in the early years of development.

Large, powerful Korean conglomerates, like Samsung and Hyundai, that played a significant role in South Korea's economic growth.

The economic event involving a substantial drop in the monetary value of a nation's currency. In South Korea, this was partially blamed on early liberalization and speculative investments.

The economic theory that argues countries should specialize in producing and exporting goods that they can produce most efficiently, using the resources they have abundantly. This is often based on factors like labor, capital, or natural resources.

A country's total income earned by its residents, both domestically and internationally. This includes income earned by foreign residents working within the country.

The total value of goods and services produced within a country during a specific period. This only considers production within the country's borders, regardless of who owns the production.

The ratio of a country's export prices to its import prices. It can indicate whether a country's trading terms are getting better or worse.

Developing countries often face challenges in terms of trade because the prices of their primary commodity exports tend to fall relative to the prices of manufactured goods over time. This can lead to decreased income for these countries.

A situation where a country's currency is valued higher than its market value, often due to government intervention.

A policy where a country deliberately lowers the value of its currency against other currencies. This can make exports cheaper and imports more expensive.

A decrease in the value of a currency relative to other currencies, but this is driven by market forces rather than government intervention.

An economic strategy where a country encourages the production of domestically manufactured goods by imposing higher tariffs on imported goods.

A measure of how much a country's currency has changed in value against a basket of other currencies.

The difference between the actual price of a good and the price it would have if there were no tariffs.

This theory suggests that international trade can help boost exports by putting previously underutilized resources to good use; essentially, allowing countries to export their surplus production.

Artificial products replacing natural commodities, reducing reliance on natural resource extraction.

The relationship between the increase in inputs and the resulting output. Increasing returns to scale means that output increases more than proportionally to inputs.

A market structure where a single producer or a group of producers controls the entire supply and sets prices.

A market structure where a small number of firms dominate the industry, potentially leading to price fixing or limited competition.

A disproportionately large increase in output due to a change in the scale of production. Think of efficiencies gained from larger production.

Regions that are more economically and socially advanced than their surroundings, often urban centers or transportation corridors in developing countries.

A tax levied on imported goods at the point of entry into the importing country, expressed as a percentage of the good's value.

A physical limit on the quantity of a specific item allowed to be imported into a country.

Economic policies that prioritize exports and encourage open trade, investment, and movement of people.

Policies focused on economic self-reliance within a developing country, including domestic technology development, import restrictions, and limited foreign investment.

Quotas established by developed countries on imports of textiles and clothing from specific developing countries, limiting their exports.

Government policies aimed at controlling the outflow of a country's currency to prevent a negative balance of payments by limiting foreign exchange transactions.

A system with two different exchange rates: an overvalued rate for essential goods and a lower, often unofficial, rate for consumer imports.

A cycle where rising prices lead workers to demand higher wages, causing producers to raise prices further, exacerbating inflation.

An official exchange rate set below the currency's real or market value, sometimes used to stimulate exports.