PSCI281 Lecture Notes - Mercantilism, Protectionism, Autarky

• School: University of Waterloo
• Department: Political Science
• Course: PSCI281
• Professor: Veronica Kitchen

Document Summary

Comparative advantage: a liberal theory of trade that says that states should produce and exports only those goods that they can produce most efficiently, and import those they can produce less efficiently. Balance of trade: the difference in monetary value between a country"s exports and imports. If exports are greater than imports, a state is in a balance of trade surplus; if its imports exceed its exports, it is in a balance of trade deficit. Balance of payments: all the flows of money in and out of a country. Includes the balance of trade (current account), capital flows (including foreign direct investment and portfolio investment) and changes in reserves. Money going in must equal money going out. Hegemonic stability theory: a realist theory which holds that the norms of the liberal economic trading system must be upheld by a hegemon who has both the will and the capacity to enforce the rules.