PLS 347-01

  • Test grade: 62 (A>70, B>50, etc)
  • Wizard of Oz = allegory for gold vs. silver standard (monetary policy)

TRADE POLICY

  • Loose monetary policy
    • cheap exports/costly imports
  • tight monetary policy
    • costly exports/cheap imports
  • free trade
    • Adam Smith
    • Ricardo
      • comparative advantage
      • best product, lowest price
      • capital flows freely
      • results in political peace (in theory)
  • jobs
    • high unemployment = politician jobs at risk too
    • infant industries
    • national security
    • not all actors play fairly
  • tariffs
  • quotas
  • subsidy
  • regs, stds & qc

INSTITUTIONAL FACTORS

  • Smoot-Hawley tariff
  • UN
  • IMF
  • W. Bank
  • GATT (became WTO)
    • liberalize trade
    • most favored nation status
    • economic discrimination banned
  • US dominance post-WWII
  • Europe regains ground 50’s
  • 1971: first US trade deficit in history
  • 70’s oil embargo
  • 80’s rise of .jp
    • regional focus on trade
    • 1988 free trade .ca
    • 1992 adds .mx in NAFTA
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