The Princeton Encyclopedia of the World Economy. (Two Volume Set)

Increasing economic globalization has made understanding the world economy more important than ever. From trade agreements to offshore outsourcing to foreign aid, this two-volume encyclopedia explains the key elements of the world economy and provides a first step to further research for students and scholars in public policy, international studies, business, and the broader social sciences, as well as for economic policy professionals. Written by an international team of contributors, this comprehensive reference includes more than 300 up-to-date entries covering a wide range of topics in international trade, finance, production, and economic development. These topics include concepts and principles, models and theory, institutions and agreements, policies and instruments, analysis and tools, and sectors and special issues. Each entry includes cross-references and a list of sources for further reading and research. Complete with an index and a table of contents that groups entries by topic, The Princeton Encyclopedia of the World Economy is an essential resource for anyone who needs to better understand the global economy. Features: More than 300 alphabetically arranged articles on topics in international trade, finance, production, and economic development International team of contributors Annotated list of further reading with each article Topical list of entries Full index and cross-references Entry categories and sample topics: Concepts and principles : globalization, anti-globalization, fair trade, foreign direct investment, international migration, economic development, multinational enterprises Models and theory : Heckscher-Ohlin model, internalization theory, New Trade Theory, North-South trade, Triffin dilemma Institutions and agreements : European Union, International Monetary Fund, World Trade Organization, World Bank, Doha Round, international investment agreements Policies and instruments : dollar standard, international aid, sanctions, tariffs Analysis and tools : exchange rate forecasting, effective protection, monetary policy rules Sectors and special issues : child labor, corporate governance, the digital divide, health and globalization, illegal drugs trade, petroleum, steel 7Summits......Page 1 COVER......Page 2 Copyright......Page 6 Contents......Page 7 Introduction......Page 9 Alphabetical List of Entries......Page 15 Topical List of Entries......Page 21 Directory of Contributors......Page 27 Principle of Absolute Advantage......Page 45 Absolute Advantage, Income, and Wages......Page 46 Affordability......Page 47 Incentives for Drug Development......Page 49 The Yaoundé Conventions......Page 50 From Yaounde ́ to the ACP......Page 51 African Union......Page 52 Economic Integration......Page 53 Governance and the African Peer Review Mechanism......Page 55 agglomeration and foreign direct investment......Page 56 Agreement on Agriculture......Page 59 History......Page 63 The Agreement’s Key Provisions......Page 65 TRIPS-Related Developments at the WTO......Page 66 Multilateralism, Bilateralism, and the Future of TRIPS......Page 68 agricultural trade negotiations......Page 69 agriculture......Page 72 Agriculture in Global Trade......Page 73 Agriculture and the World Trade Organization......Page 75 Food, Agriculture, and International Development......Page 76 The New Agricultural Economy in Developing Countries......Page 77 The Role of Agriculture in the World Economy......Page 78 aid, bilateral......Page 79 Controversies......Page 80 History and Origins......Page 81 Food Aid Policy Debates......Page 82 aid, humanitarian......Page 83 De.ning Characteristics......Page 84 Humanitarian Policy Debates......Page 85 Early Foreign Aid......Page 86 Foreign Aid during the Cold War......Page 87 Poverty Reduction and Recent Development Models......Page 88 Types of Aid and Harmonization......Page 89 Levels of Aid, Aid Quality, and Evaluation......Page 90 Private Initiatives and New Donors......Page 92 A New Way Forward......Page 93 The Incentives of Donors and Aid Agencies......Page 95 The Interaction between Donors and Country Recipients......Page 96 The Delivery of Aid in the Recipient Countries......Page 97 The Market for Aid......Page 98 aid, military......Page 99 Military Spending in Low-Income Countries......Page 100 air transportation......Page 101 Airports......Page 103 Air Navigation Systems Providers......Page 104 Andean Community......Page 105 Governance......Page 106 Andean Customs Union and Free Trade Zone......Page 107 anti-dumping......Page 108 Administration of Anti-dumping Rules......Page 109 Anti-dumping in Practice......Page 111 anti-globalization......Page 112 Origins......Page 113 Who’s Who?......Page 114 Main Concerns......Page 115 Hegemonic Shifts......Page 116 The Future of Anti-globalization......Page 117 The Notion of ‘‘Applied’’......Page 118 Overview of Model Structure......Page 119 Standard Framework......Page 120 Other Extensions......Page 121 Adaptation and Technology Transfer......Page 123 Appropriate Technology, Efficiency, and Spillovers......Page 124 Asia Pacific Economic Cooperation (APEC)......Page 125 Strengths and Weaknesses......Page 126 Adjustment in the Swan Diagram......Page 128 Effective Market Classification......Page 129 Allowing for Shocks......Page 130 Economic Cooperation......Page 131 ASEAN Economic Community......Page 132 asymmetric information......Page 133 Asymmetric Information and Financial Crises......Page 134 Lender of Last Resort......Page 135 Measures to Limit Moral Hazard......Page 136 Debt Restructuring and Burden Sharing......Page 139 Crisis Management: Finding the Right Balance......Page 141 bailouts......Page 142 Debate Surrounding IMF Crisis Lending......Page 143 Has IMF Crisis Lending Been Successful?......Page 145 Uses......Page 146 Accounts......Page 147 Double-Entry Bookkeeping......Page 149 The Effects of Monetary and Fiscal Policies on the Balance of Payments......Page 150 Key Balance Sheet Concepts......Page 151 Taxonomy of Balance Sheet Risks......Page 153 Operationalizing and Extending the BSA......Page 154 Balassa-Samuelson effect......Page 155 The Theory of Balassa-Samuelson......Page 156 band, basket, and crawl (BBC)......Page 157 Baskets......Page 158 Crawl......Page 159 Why a BBC System?......Page 160 The BIS after World War II......Page 161 The BIS after Bretton Woods......Page 162 Bank of Japan......Page 163 Conduct of Monetary Policy......Page 164 banking crisis......Page 165 Causes of Banking Crises......Page 166 Twin Crisis in Emerging Markets......Page 167 Basel Convention......Page 168 Challenges for Enforcement......Page 169 beggar-thy-neighbor policies......Page 170 black market premium......Page 171 Bonn Summit......Page 173 brain drain......Page 175 Impacts on the Source Country......Page 176 Brain Drain as a Serious Issue for Developing Countries......Page 177 Policy Recommendations......Page 178 brain gain......Page 180 National Origin and Brain Waste......Page 182 Factors Contributing to Differences in Brain Waste......Page 183 Destination Country Labor Markets......Page 184 Bretton Woods system......Page 185 Creation of the Bretton Woods Institutions......Page 186 Dollar Standard......Page 187 bubbles......Page 189 Canonical View......Page 193 Dynamics of Growth and Capital Accumulation in an Open Economy......Page 194 Recent Experience......Page 195 capital controls......Page 196 Classifying Restraints on Capital Movements......Page 197 Data on Capital Controls......Page 199 Measuring Capital Flight......Page 200 Policy Responses to Capital Flight......Page 201 capital flows to developing countries......Page 202 Countercyclical Prudential Regulation and Supervision......Page 203 Implications......Page 205 Quantity-Based Measures......Page 207 Regulatory, Institutional, and Other Measures......Page 209 carry trade......Page 210 Market Efficiency......Page 211 Carry Trades and Asia......Page 212 Integration Efforts in the 1950s and 1960s......Page 213 A Revival of Integration Efforts in the 1990s......Page 214 Challenges and Opportunities......Page 216 Agreement Highlights......Page 217 What Is Child Labor?......Page 218 The Child Labor Decision......Page 219 The End of Child Labor?......Page 220 History of the Concept......Page 221 Governance of Global Chains......Page 222 Future Research and Complementary Approaches......Page 224 commodity-price pegging......Page 226 Other Commodity-Based Proposals......Page 227 The Features of the CAP at the Time of Inception......Page 228 The Evolution of the CAP......Page 229 CAP Reform in 2003 and Thereafter......Page 230 The Future of the CAP......Page 231 Carrots and Ministates......Page 232 Explaining Currency Domains......Page 233 The Adoption of the Euro......Page 234 common market......Page 235 Origin and Background......Page 238 Key Elements and Procedures......Page 239 Impact on Member States......Page 240 Relation with External Actors......Page 241 comparative advantage......Page 242 18th-Century Views on the Causes of Specialization......Page 243 Ricardo’s Example of Comparative Advantage......Page 244 Classical Perspectives on Comparative Advantage after Ricardo......Page 245 Neoclassical Perspectives on Comparative Advantage......Page 246 Comparative Advantage and the New Trade Theory......Page 247 Comparative Advantage: An Enduring Legacy......Page 248 competition policy......Page 249 Acquiring a Competitive Advantage......Page 252 National Competitive Advantage......Page 253 Clustering and Sustainability......Page 254 Competitiveness......Page 255 Conflicted Virtue in East Asia......Page 257 Effects of Conflicted Virtue......Page 258 Defining Contagion......Page 259 Causes and Channels of Contagion......Page 260 Examples of Crisis Contagion......Page 261 Policy Implications......Page 262 Convention on Biological Diversity......Page 263 Listing of Species......Page 266 Enforcement......Page 267 Capital Account Convertibility and Growth......Page 268 Theory versus Reality......Page 269 corporate governance......Page 271 Corporate Governance Systems......Page 272 Typology of Legal Strategies for Protecting Investors......Page 273 Good Corporate Governance......Page 274 Types of Corruption......Page 276 Causes......Page 277 Consequences......Page 278 Anticorruption Strategies......Page 279 Economic Consequences of CVD Laws......Page 280 Countervailing Duties from 1890 to the Present......Page 281 The Future of CVD Laws......Page 283 currency board arrangement (CBA)......Page 284 Debating the Pros and Cons......Page 285 Types of Money......Page 287 Private Issue of Outside Money......Page 288 currency crisis......Page 289 First-Generation Crises: Fundamental Disequilibriums......Page 290 Second-Generation Crises: The Role of Expectations......Page 291 Financial Sector Weakness......Page 293 The Political Economy of Currency Crises......Page 294 Crisis Prevention and Management......Page 295 Dollarization......Page 298 customs unions......Page 300 Country Experiences with Deflation......Page 305 Prevention May Be Easier Than Cure......Page 306 democracy and development......Page 307 Democracy Promotes Development......Page 308 Development Promotes Democracy......Page 310 The Econometric Literature......Page 311 dependency theory......Page 313 External versus Internal Limits to Development......Page 314 Financial Dependency and the Original Sin......Page 315 deposit insurance......Page 316 The Safety Net for the Banking System......Page 317 Deposit Insurance, Risk Taking, and Banking Crises......Page 318 Deposit Insurance in Cross-Border Banking......Page 319 Economic Development......Page 321 Human Development......Page 322 Social Development......Page 323 digital divide......Page 325 discipline......Page 328 Exchange-Rate-Based Stabilization......Page 329 Discipline from International Financial Markets......Page 330 Origins of Agricultural Protection......Page 331 Policy Developments since the 1950s......Page 332 Methodology for Estimating Distortions to Incentives......Page 333 New Global Estimates of Distortions, 1955– 2004......Page 335 Doha Round......Page 337 Major Players and Issues......Page 339 Progress and Prospects......Page 341 The Dollar as Facilitator of International Exchange......Page 343 The Dollar as Nominal Anchor......Page 345 domestic content requirements......Page 346 Impact of Content Requirements......Page 347 dominant currency......Page 349 The U.S. Dollar and the Euro as Dominant Currencies......Page 350 Benefits of Currency Dominance......Page 351 dual exchange rate......Page 352 dumping......Page 353 Basic Components of an EWS......Page 355 The ‘‘Signals’’ Approach......Page 356 The Structural Approach......Page 357 Origin and Background......Page 358 Impact on Member States......Page 360 Relation with External Actors......Page 361 Population, Demographic Change, and International Migration......Page 362 Physical Capital Accumulation and Foreign Direct Investment......Page 363 Technological Change, Human Capital, and Brain Drain......Page 364 Land, Agriculture, and Geography......Page 365 Natural Resources and the Dutch Disease......Page 366 International Trade and Commercial Policy......Page 367 Financial Development and International Financial Markets......Page 368 Foreign Aid and Development......Page 369 Macroeconomic Policies......Page 370 economies of scale......Page 376 National, Aggregative Economies of Scale External to the Firm......Page 377 Disaggregative Economies of Scale......Page 378 International Economies of Scale......Page 379 Applications of Scale Economies......Page 380 Nominal versus Real......Page 381 Asset and Liability Weights......Page 382 Modeling of the Concept......Page 383 Theoretical Criticisms......Page 384 electronic commerce......Page 385 The Economic Significance of Electronic Commerce......Page 386 The Role of the WTO......Page 387 The Role of Electronic Commerce in the Modern World Economy......Page 389 Purchasing Power Parity (PPP) Reconsidered......Page 390 Behavioral Equilibrium Exchange Rate......Page 391 New Open Economy Macroeconomic Class of Models......Page 392 Other Approaches......Page 393 euro......Page 394 Euro as an International Currency......Page 395 Eurocurrencies......Page 396 Interest Rates......Page 397 Size of Market......Page 398 Objectives and Tasks of the ECB......Page 399 Enlargement......Page 400 Exchange Rate Mechanism......Page 401 Delors Report and Beyond......Page 403 European Union......Page 404 Origins......Page 405 Development of the EC......Page 406 The Overreaching EU......Page 408 Prospects......Page 409 evolution of development thinking......Page 410 Primacy of Markets......Page 412 Growth Theory and Development Thinking......Page 414 No Single Model for Development......Page 415 exchange market pressure......Page 417 Practical Issues......Page 418 exchange rate forecasting......Page 419 Nonstructural Analysis......Page 420 exchange rate pass-through......Page 421 What Determines Exchange Rate Pass-Through?......Page 422 Policy Relevance......Page 423 Floating Rate Regimes......Page 424 National Legal Tender, Monetary Unions, and Currency Boards......Page 425 Exchange Rate Regimes, Monetary Policy, and International Capital Controls......Page 426 Optimal Exchange Rate Regimes and Regime Collapses......Page 427 exchange rate volatility......Page 428 Intraregime Volatility: Dornbusch Overshooting Model......Page 429 Intraregime Volatility: NOEM......Page 430 Interregime Volatility......Page 431 exchange rate weapon......Page 433 Adjustment Conflict and Causal Mechanism......Page 434 Critiques......Page 435 Exchange Rate Levels......Page 437 Exchange Rate Volatility......Page 438 exorbitant privilege......Page 440 Internal and External Balances......Page 442 Effects of Expenditure Switching Policies......Page 443 export processing zones......Page 444 EPZs and Host Country Development......Page 445 China’s New Role in the Global EPZ Industry......Page 446 Policy Implications......Page 447 The Case against Export Promotion......Page 448 Export Opportunities and Mechanisms for Export Development......Page 449 expropriation risk......Page 451 Global Firm Organization and Modes of FDI......Page 453 Evidence on FEDs and FDI......Page 455 fair trade......Page 456 Fair Trade History......Page 457 Impacts, Debate, and Paradox......Page 458 Why Is Floating So Fearsome?......Page 460 Significance......Page 461 Federal Reserve Board......Page 462 Conduct of Monetary Policy......Page 463 International Responsibilities......Page 464 Interpreting the Feldstein-Horioka Results......Page 465 Persistence of the ‘‘Puzzle’’......Page 466 Other Home Biases......Page 467 Financial Crises and Financial Integration......Page 468 Financial Opening and Financial Crises: The Evidence......Page 469 Internally Oriented Controls and Liberalization......Page 472 Waves of Financial Liberalization......Page 473 financial repression......Page 474 Rationale for and Types of Financial Repression......Page 475 Impacts of Financial Repression......Page 476 International Trade in Financial Services......Page 477 Liberalization in the GATS......Page 479 Three Pillars of Liberalization......Page 480 Trade Liberalization and Sound Financial Systems......Page 482 Firm-Level versus Plant-Level Fixed Costs......Page 483 Empirical Assessment......Page 484 footloose production......Page 485 Implications of Footloose Production......Page 486 foreign direct investment (FDI)......Page 488 Troubling Statistics......Page 489 The International Business Approach......Page 490 Early Trade-Theory Models......Page 491 Empirical Evidence......Page 492 The Way Forward......Page 493 foreign direct investment and exit of local .rms......Page 494 Comparison of Exit in Foreign and Local Firms......Page 495 Impact of FDI on Exit of Local Firms......Page 496 Policy Implications......Page 497 How Does FDI Affect Home-Country Exports?......Page 498 How Does FDI Affect Host-Country Exports?......Page 499 foreign direct investment and innovation, imitation......Page 500 How Innovation Affects FDI......Page 501 How Imitation Affects FDI......Page 502 International Technology Transfer and the Role of FDI......Page 504 Policy Implications......Page 505 The Role of International Institutions......Page 506 foreign direct investment and labor markets......Page 508 FDI and the Host-Economy Labor Market......Page 509 FDI and the Source-Economy Labor Market......Page 511 FDI’s Effect on the Source Country’s Tax Revenues......Page 514 Policy Implications......Page 515 foreign direct investment: the OLI framework......Page 516 Location......Page 517 Cross-Border Mergers......Page 519 The OLI Framework: An Overall Assessment......Page 520 foreign direct investment under monopolistic competition......Page 521 Theory......Page 522 Policy Issues......Page 523 Empirical and Theoretical Points of Departure......Page 525 Models of International Oligopoly......Page 526 Resource Allocation Implications......Page 529 Types of Restrictions and Measurement......Page 530 Policy Reform......Page 531 Effectiveness of Foreign Exchange Intervention......Page 532 Practice of Foreign Exchange Intervention......Page 533 Research Challenges......Page 534 Entry Modes......Page 535 Location......Page 536 Timing of Entry......Page 537 Interdependencies......Page 538 Explaining the Forward Premium Puzzle......Page 539 Reasons behind the Puzzle......Page 540 fragmentation......Page 542 Foreign Direct Investment......Page 543 Productivity, Employment, and Wages......Page 544 Fragmentation and Interdependence......Page 545 free trade area......Page 546 Stepping Stones, Stumbling Blocks, or Building Blocks?......Page 547 Free Trade Area of the Americas (FTAA)......Page 549 gains from trade......Page 553 Definitions of the Gains from Trade......Page 554 18th-Century Perspectives on the Gains from Trade......Page 555 David Ricardo’s Twofold Gains from Trade......Page 556 John Stuart Mill: Splitting the Gains from Trade......Page 557 Neoclassical Depiction of the Gains from Trade......Page 558 The Heckscher-Ohlin-Samuelson Theory and Beyond......Page 559 Female Employment in Export Manufacturing......Page 562 Wage Discrimination......Page 563 Women as the World’s Flexible Work Force......Page 564 Origins of the GATT......Page 565 Basic Principles......Page 566 Negotiating Rounds......Page 568 The Uruguay Round......Page 569 What Became of the GATT?......Page 570 The Scope of the GATS......Page 572 The Rules of the GATS......Page 573 Doha Agenda and Beyond......Page 575 Mission, Funding, and Change......Page 576 Tackling Global Environmental Dilemmas and Achieving Results......Page 577 Inadequate U.S. Savings......Page 580 Structural Imbalances in Europe and Japan......Page 582 Dismal Poverty and Growing Global Inequality......Page 583 Concepts, Methods, and Data......Page 586 The Evolution of Global Inequality and Poverty......Page 589 Inequality in Other Dimensions......Page 591 global public goods......Page 594 The Provision Path of Global Public Goods......Page 595 Policy Implications and Challenges......Page 597 The Current Stage of the Debate on Global Public Goods......Page 598 globalization......Page 599 Earlier Examples of Economic Globalization......Page 600 Learning from These Earlier Eras of Globalization......Page 601 Studying the Current Period of Globalization......Page 602 Globalization and Identity......Page 603 Challenges Ahead in the Study of Globalization......Page 604 Basic Principles......Page 605 Basic Facts......Page 606 The Gold Standard in the Interwar Period......Page 607 government procurement......Page 609 Alternative Speci.cations......Page 611 Theoretical Considerations......Page 612 Assessment......Page 613 Group of Seven/Eight (G7/G8)......Page 614 Assumptions of the Theory......Page 616 The Benchmark Case of a Closed Economy......Page 617 Slow Convergence with International Capital Flows......Page 618 The East-Asian Miracles......Page 619 growth in open economies, Schumpeterian models......Page 620 Economic Openness and Growth......Page 622 Government Interventions......Page 623 Gulf Cooperation Council......Page 624 Income, Inequality, and Health......Page 631 Health, Growth, and the Location of Economic Activity......Page 632 Health Risks Associated with the Movements of Goods and People......Page 633 The Setting and Principal Results......Page 635 Deriving the Theorems......Page 636 Trade and Wages......Page 639 Investment Strategy......Page 641 Investment Issues......Page 642 Role of Hedge Funds......Page 643 Incentives to Hedge......Page 644 Epidemiology and Demographics......Page 645 International Response......Page 646 UNAIDS and the Global Fund......Page 647 home country bias......Page 648 Possible Explanations of Home Country Bias......Page 649 Home Country Bias in Macroeconomics......Page 650 Sudden Stops and Output Contractions......Page 651 Importance of Financing via Foreign Direct Investment......Page 652 illegal drugs trade......Page 655 Evolution of Drug Markets and Variable Characteristics of Suppliers......Page 656 import substitution industrialization......Page 658 ISI Policy Instruments......Page 659 Experience with ISI......Page 660 impossible trinity......Page 663 The Vanishing Middle?......Page 664 Can a Country Escape the Impossible Trinity?......Page 665 infant industry argument......Page 666 Alternative Assumptions......Page 668 Markov versus Non-Markov Strategies......Page 669 in.ation targeting......Page 670 Review of the ICT Literature......Page 672 Investment in ICT and Its Diffusion......Page 673 The Effects of ICT on Economic Growth......Page 675 New Economy and the Productivity Paradox......Page 676 The Role of ICT in the World Economy......Page 677 Infrastructure Broadly Defined......Page 679 Corruption......Page 680 Remaining Questions......Page 681 intangible assets......Page 682 Transferability of Goodwill Assets......Page 683 Intangible Assets and Spillovers to Foreign Economies......Page 684 National and International Dimensions of Intellectual Property Rights......Page 685 The International Debate Regarding Intellectual Property Rights......Page 687 Other Controversial Issues......Page 688 Future Concerns......Page 689 Effect of IPRs on Technology Transfer and Innovation......Page 690 Effect of IPRs on Imports, FDI, and Licensing......Page 691 Con.icts between Developed and Developing Countries over IPRs......Page 692 interest parity conditions......Page 693 Covered Interest Parity Assessed......Page 694 The Empirical Evidence for Uncovered Interest Parity......Page 695 Real Interest Parity Measured......Page 696 internalization theory......Page 697 The Internalization Decision and Opportunistic Behavior......Page 698 Property Rights Approach and the Holdup Problem......Page 699 Areas Needing More Research......Page 701 Ambitious Proposals......Page 703 Modest Reforms......Page 704 international financial centers......Page 706 Growth and Evolution of IFCs......Page 707 Consequences of Growth of IFCs......Page 708 international income convergence......Page 709 Convergence and the Solow Model......Page 710 Convergence among Interdependent Economies......Page 711 Colonialism......Page 713 The Governance Agenda in International Development......Page 714 Why Institutions Are Difficult to Transfer......Page 715 Future Directions......Page 716 The Rise of Bilateral Investment Treaties (BITs)......Page 717 U.S. Free Trade Agreements (FTAs)......Page 718 European Union Agreements......Page 719 Multilateral Initiatives......Page 720 Effects on Investment......Page 721 Dispute Settlement: Rising Case Load and Rising Awards......Page 722 Flaws in the System of Property Rights Enforcement......Page 723 The ILO’s Tools......Page 725 international liquidity......Page 727 Governance......Page 730 Surveillance......Page 731 Lending......Page 732 Criticisms......Page 733 Lending Procedures......Page 734 Analytical Tools......Page 735 Compliance and Recurring Usage......Page 736 International Monetary Fund surveillance......Page 737 Limitations......Page 738 History......Page 739 Rationale for Coordination......Page 741 The Gains from Coordination......Page 742 Coordination Substitutes: Avoiding Con.icts over Shared or Linked Targets......Page 743 Interinstitutional and Rule-Based Coordination......Page 744 Going Forward......Page 745 international reserves......Page 746 International Reserves and Self-Insurance......Page 747 International Reserves: Precaution versus Mercantilism......Page 748 intrafirm trade......Page 750 intraindustry trade......Page 752 Data Aggregation......Page 753 Empirical Characteristics of Intraindustry Trade......Page 754 Causes of the J-Curve......Page 757 joint ventures......Page 758 Profit-Maximizing Joint Ventures......Page 759 Host-Country Policy......Page 760 Model Description......Page 763 Firm Location, Foreign Af.liate Production, and International Trade......Page 764 FDI Liberalization, Factor Prices, and Welfare......Page 765 Extension......Page 766 Kyoto Protocol......Page 767 Labor Standards and International Trade Negotiations......Page 769 Enforcement and Issue Linkage......Page 770 Latin American debt crisis......Page 771 From Boom to Bust......Page 772 Crisis Resolution and Reform......Page 773 Two Views of the LOLR......Page 775 The IMF as International Lender of Last Resort......Page 776 linkages, backward and forward......Page 777 Intersectoral Linkages......Page 778 Inter.rm Linkages......Page 779 Policy Implications......Page 780 Conventional Monetary Policy Ineffectiveness......Page 781 Overcoming a Liquidity Trap......Page 782 Standard Assumptions......Page 783 Host-Country Policies......Page 784 Technology and Agglomeration Economies......Page 785 Firm Strategy......Page 786 New Location Theory: Random Chance and Time......Page 787 Policy Applications......Page 788 Components of the Louvre Accord......Page 790 Germany and Japan......Page 791 Maastricht Convergence Criteria......Page 793 market access......Page 794 The Impact of Regional Economic Integration......Page 795 Empirical Evidence and the Gravity Equation......Page 797 Policies to Attract FDI......Page 798 Marshall-Lerner condition......Page 799 Empirical Studies......Page 800 mercantilism......Page 801 Neomercantilism......Page 802 Mercosur......Page 803 mergers and acquisitions......Page 806 Recent History......Page 808 Types of Migration......Page 809 The Migration Decision......Page 811 Impacts on Destination Countries......Page 812 Policy Priorities......Page 813 migration governance......Page 814 Governance and Migration......Page 815 Top Down, Bottom Up......Page 816 Whither Migration Governance......Page 818 Millennium Development Goals......Page 819 MCI in Practice......Page 821 Role of Exchange Rate......Page 822 Constructing a Monetary Policy Rule......Page 823 Exchange Rate and Monetary Policy Rules......Page 824 Explaining Dominance......Page 826 Current Practical Approaches for Policymakers......Page 827 money laundering......Page 829 Combating Money Laundering......Page 830 Controllability of Money Supply......Page 831 Macroeconomic Implications of Money Supply Growth......Page 832 Money Supply in an Open Economy......Page 833 Models of Monopolistic Competition......Page 834 movement of natural persons......Page 838 multilateral environmental agreements......Page 839 The WEO Alternative......Page 840 The Years Ahead......Page 841 Pre-GATT Trade Negotiations......Page 843 Subjects and Modalities......Page 844 Results......Page 846 multilateralism......Page 848 multinational enterprises......Page 850 History of the MNE......Page 851 Typology of MNE Subsidiaries......Page 852 MNEs and Economic Development......Page 854 Political Economy, International Regulation, and MNE......Page 855 Benefits of Multiple Currencies......Page 857 Mundell-Fleming model......Page 858 Diagrammatic Representation......Page 859 Policy Shocks......Page 860 Coining of the Expression......Page 862 Location Decision......Page 865 Cumulative Causation......Page 866 Multilocation Economies......Page 867 The Baseline NOEM Model......Page 869 Extensions of the Original NOEM Model......Page 870 Reasons for Developing New Trade Theory......Page 873 Explaining Intraindustry Trade......Page 874 Topics in New Trade Theory......Page 875 nondiscrimination......Page 877 Nondiscrimination in the Form of Most-FavoredNation Treatment......Page 878 Nondiscrimination in the Form of National Treatment......Page 881 De.nitions and Classifications......Page 884 The Role of NGOs in the United States and the World Economy......Page 885 Challenges to NGOs......Page 886 Taxlike Nontariff Trade Measures......Page 887 Quantitative Measures......Page 888 Government Procurement Practices......Page 889 NTMs in International Trade Agreements and Negotiations......Page 890 Theories of Trade and Nontraded Goods......Page 892 Welfare Analysis and Nontraded Goods......Page 894 North American Free Trade Agreement (NAFTA)......Page 895 What Is NAFTA?......Page 896 The NAFTA Experience to Date......Page 897 The Data......Page 899 North-South Trade Models......Page 900 North-South Trade and Wages......Page 902 Growth and Activities of OFCs......Page 905 Concerns about OFCs......Page 906 The Partial Equilibrium Approach......Page 907 General Equilibrium and Oligopoly......Page 908 The Gains from Trade......Page 911 Variants of OCA Theory......Page 913 Testing OCA Theory......Page 914 Organisation for Economic Co-operation and Development (OECD)......Page 916 Organization, Output, and Analytical Perspectives......Page 917 OECD and National Economic and Social Policy......Page 918 Evolution of OPEC......Page 919 OPEC’s Future Prospects......Page 920 Economic Impact of Original Sin......Page 923 Reasons behind Original Sin......Page 924 outsourcing/offshoring......Page 925 Effect of Outsourcing on Wages: Evidence from the 1980s......Page 926 Outsourcing versus Technological Change......Page 927 Trade Costs and Outsourcing across Firms......Page 928 Regional Variation in Wage Inequality in the United States......Page 929 Offshoring’s Impact on the Service Sector......Page

Increasing economic globalization has made understanding the world economy more important than ever. From trade agreements to offshore outsourcing to foreign aid, this two-volume encyclopedia explains the key elements of the world economy and provides a first step to further research for students and scholars in public policy, international studies, business, and the broader social sciences, as well as for economic policy professionals.

Written by an international team of contributors, this comprehensive reference includes more than 300 up-to-date entries covering a wide range of topics in international trade, finance, production, and economic development. These topics include concepts and principles, models and theory, institutions and agreements, policies and instruments, analysis and tools, and sectors and special issues. Each entry includes cross-references and a list of sources for further reading and research. Complete with an index and a table of contents that groups entries by topic, The Princeton Encyclopedia of the World Economy is an essential resource for anyone who needs to better understand the global economy.

Features:

• More than 300 alphabetically arranged articles on topics in international trade, finance, production, and economic development
• International team of contributors
• Annotated list of further reading with each article
• Topical list of entries
• Full index and cross-references

Entry categories and sample topics:

• Concepts and principles: globalization, anti-globalization, fair trade, foreign direct investment, international migration, economic development, multinational enterprises
• Models and theory: Heckscher-Ohlin model, internalization theory, New Trade Theory, North-South trade, Triffin dilemma
• Institutions and agreements: European Union, International Monetary Fund, World Trade Organization, World Bank, Doha Round, international investment agreements
• Policies and instruments: dollar standard, international aid, sanctions, tariffs
• Analysis and tools: exchange rate forecasting, effective protection, monetary policy rules
• Sectors and special issues: child labor, corporate governance, the digital divide, health and globalization, illegal drugs trade, petroleum, steel

An essential reference to all facets of the world economyIncreasing economic globalization has made understanding the world economy more important than ever. From trade agreements to offshore outsourcing to foreign aid, this two-volume encyclopedia explains the key elements of the world economy and provides a first step to further research for students and scholars in public policy, international studies, business, and the broader social sciences, as well as for economic policy professionals.Written by an international team of contributors, this comprehensive reference includes more than 300 up-to-date entries covering a wide range of topics in international trade, finance, production, and economic development. These topics include concepts and principles, models and theory, institutions and agreements, policies and instruments, analysis and tools, and sectors and special issues. Each entry includes cross-references and a list of sources for further reading and research. Complete with an index and a table of contents that groups entries by topic, The Princeton Encyclopedia of the World Economy is an essential resource for anyone who needs to better understand the global economy.More than 300 alphabetically arranged articles on topics in international trade, finance, production, and economic developmentInternational team of contributorsAnnotated list of further reading with each articleTopical list of entriesFull index and cross-references Entry categories and sample topics:Concepts and principles: globalization, anti-globalization, fair trade, foreign direct investment, international migration, economic development, multinational enterprisesModels and theory: Heckscher-Ohlin model, internalization theory, New Trade Theory, North-South trade, Triffin dilemmaInstitutions and agreements: European Union, International Monetary Fund, World Trade Organization, World Bank, Doha Round, international investment agreementsPolicies and instruments: dollar standard, international aid, sanctions, tariffsAnalysis and tools: exchange rate forecasting, effective protection, monetary policy rulesSectors and special issues: child labor, corporate governance, the digital divide, health and globalization, illegal drugs trade, petroleum, steel