Civil Wars and Terrorism
A Catalan independence supporter drives a truck into a busy market, killing four civilians. When confronted by the police, he demands that the Spanish government allow an independent Catalan government. What logic of terrorism is this?
Provocation or coercion
Subsidies to domestic industries, quantitative restrictions on the # of foreign products that can enter, unequal regulations
All five PS5 GSIs decide to buy and operate a textbook factory in Canada. What type of investment is this? Why is it not the other type?
Foreign direct investment- this is not a portfolio investment because we have control over the foreign investment/operation.
How can a currency collapse in one country impact others?
Spread of panic, interconnected economies through trade and investment, governmental actions to soften impact
The government of Somalia proposes a peace agreement where it agrees to allow Somaliland (a de facto state in the northern region of the country) to maintain independence as long as it does not maintain a standing army. Why might this agreement not work?
Credible commitment problem- Somaliland cannot know that the Somali government will not renege as soon as the war is over, and without arms, has no means to resist.
Under the Ricardo-Viner theory, who is more likely to support tariffs on foreign car imports- car manufacturing company executives, or car assembly line workers?
Trick question- both will support tariffs because they're in the same sector.
Many people around the world migrate to other countries to work and earn money to send back home. What theory of international trade explains this phenomenon, and why?
Heckscher-Ohlin (NOT Stolper-Samuelson): goods flow from areas where plentiful to areas where scarce.
What is the impossible trilemma?
Of the following three:
- fixed exchange rates
- free capital flows
- independent monetary policy
States can only have two at one time
How can international institutions help resolve bargaining failures in both civil war and terrorism scenarios? Give an example for each.
Many ways...
Are democracies likelier to have tariffs than autocracies? Why or why not?
There are many ways you could answer this question...
How do domestic interests influence the behavior of international lenders and borrowers? Think about debt servicing, who wants it, and why.
Publics in lending countries can pressure their government to get the money back (and pressure/coerce the recipient state into servicing the debt). Publics in borrowing countries can pressure their government into not servicing the debt because of unpopular austerity measures (cuts to services, higher taxes, etc.)
Kazakhstan has relatively more land than it has capital or labor. Of the three groups, who would support an strong Kazakh Tenge, and who would support a weak currency?
Those in land-intensive industries seek to export, and would support a weak currency. Those in capital and labor are concerned more with purchasing power, and would support a strong currency.