What is International Political Economy?

#1 The International Monetary System

About the IMS Currency exchange GDP measures of monetary wealth GDP per capita- dev. level Country GDP (IMF 2018) GDP p/c in PPP(IMF 2018) United States $20.5 T (1) $59,495 (11) China $13.5 T (2) $16,624 (79) Japan $5 T (3) $42,659 (28) Germany $4 T (4) $50,206 (17) India $2.7 T (7) $7,714 (122) Nigeria (1st non-EE GS) $400 B (31) $5,927 (129) EU $19.1 T $38,370 (32-bt. SP & IT)

China’s Income Distribution http://www.theatlantic.com/china/archive/2013/09/mapping-chinas-income-inequality/279637/

Calculations based on IMF data 2015 and 2016 Big Mac Index IMS: Buying Power How money works Purchasing Power Parity (PPP) Compare currency values Currency exchanges 2018- $5.3 T exchanged source ~$14.5 B/ per day Top 5 city currency exchange centers? Big Mac (ave. cost) Could Buy Abroad U.S. $4.93 11,028 Big Macs 28,616 Big Macs in India India $1.90 895 Big Macs 345 Big Macs in U.S. Calculations based on IMF data 2015 and 2016 Big Mac Index

#1 London #2 NYC #5 Tokyo #3 Singapore #4 Hong Kong http://www.scmp.com/business/markets/article/2014979/hong-kong-edges-out-tokyo-worlds-fourth-largest-forex-hub

IMS: GN Domination Bretton Woods Agreement (1944) Colonization Post WWII US Goals Democracy, allies, capitalism Bretton Woods Agreement (1944) Int’l Monetary Fund (IMF) Stability World Bank (WB) Development ¤ http://www.wsj.com/articles/SB122489333798168777

Europe Tries to Compete European Union (1992) 28 members Brexit- U.K. votes to leave =27 Adoption of euro (1999) 19 members Global recession – (2008) Eurocrisis – (2010) ¤ http://www.economonitor.com/nouriel/2015/01/05/9-ways-the-eurozone-is-more-fragile-than-the-us/

#2 The International Trade System

About the ITS GN- services EEs- mix GS- primary Exchange of goods & services 2 types of trade Merchandise trade Primary goods Raw foods, fuels, fibers, minerals, water Manufactured goods Processed Service trade GN- services EEs- mix GS- primary ¤

ITS: Interdependent Global trade flows Outsourcing Offshoring 3rd party Offshoring Abroad Reshoring Returning ¤ Goods & Services https://www.wto.org/english/res_e/statis_e/wts2017_e/WTO_Chapter_02_e.pdf ; https://www.wto.org/english/res_e/statis_e/wts2018_e/wts18_toc_e.htm 1913 $20 Billion = $55,000/ day 2017 $17.43 Trillion = >$47.75 B/day Barcelona, Spain

ITS: Trade Pacts Why countries trade How they trade Bilateral EU-Japan, Canada- UK, US- EU Multilateral  USMCA (was NAFTA), WTO, etc. How do trade deals affect you? Cheaper imports More product choices Standardized products One converter ¤

ITS: Trade Pacts & Issues Jeep Billboard in Shanghai http://www.nytimes.com/2014/05/24/business/wto-ruling-on-chinese-tariffs-on-us-cars.html?_r=0 What pacts do Fight protectionism Challenges Trade disputes US-SK washing machines link WTO dispute mechanism link 500 complaints; Ruled on 350+ cases Recent rulings US tariffs on steel from India, China Chinese tariffs on US cars ¤

ITS: Trade Issues What’s up with cheesemakers? Denomination of origin = proprietary name When is ‘manchego’ really ‘manchego’? Spain wants to own the name Mexico says it’s generic How does this issue affect trade? Dispute slowing EU-MX trade update Viewed as trade barrier SP wants sole use Belgium 1996 ¤

ITS: GN Advantage Colonization Uneven trade Rising role of EEs GS Primary goods Cash crops Uneven trade Rising role of EEs Bigger economy = more leverage

#3 The International Investment & Finance

About II & IF Int’l Finance Countries’ ‘checking accounts’ Debits Credits

About II & IF Int’l investment Funds invested abroad 2 ways: 1) Foreign Direct Investment (FDI) MNCs Control assets $$$ 2) Foreign Portfolio Investment (FPI) Stocks, bonds, etc. Earn dividends ¤

II & IF: Interdependent FDI, FPI  WWII U.S.  MNCs invest abroad after war Who gets the most FDI? Not even ¤ https://blog.trade.gov/2017/08/15/new-un-report-highlights-united-states-lead-in-global-fdi-and-digital-economy/

II & IF: GN Domination Post-WWII US hegemony Top 500 MNCs- Who?  Where? Gross Corporate Product (GCP) ¤ Rank Country # of top 500 MNCs 1 US 132 2 China 109 3 Japan 52 4 France 29 5 Germany 28 http://beta.fortune.com/global500

Economic Sanctions

NK Trade & Workers 90% of NK trade is w/ China NK workers ~35% of NK’s GDP Rejected $1M coal shipment NK workers Earn in China, Russia, ME, Poland, Uruguay Most goes to NK gov’t Goods exported to US ¤

Sanctions & NK UN Resolution China’s concerns Shared border Missile tests Assassinated brother Trade ¤ http://www.npr.org/sections/thetwo-way/2017/02/18/515955289/china-suspends-coal-imports-from-north-korea-dealing-big-blow-to-pyongyang