COPYRIGHT NOTICE: Edited by Kenneth A. Reinert & Ramkishen S. Rajan: The Princeton Encyclopedia of the World Economy is published by Princeton University Press and copyrighted, © 2008, by Princeton University Press. All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher, except for reading and browsing via the World Wide Web. Users are not permitted to mount this file on any network servers.

Follow links Class Use and other Permissions. For more information, send email to: permissions@press.princeton.edu

Alphabetical List of Entries

absolute advantage access to medicines African Caribbean Pacific–European Union (ACP-EU)

partnership agreements African Union agglomeration and foreign direct investment Agreement on Agriculture Agreement on Trade-Related Aspects of Intellectual

Property Rights (TRIPS) agricultural trade negotiations agriculture aid, bilateral aid, food aid, humanitarian aid, international aid, international, and political economy aid, military air transportation Andean Community anti-dumping anti-globalization applied general equilibrium models appropriate technology and foreign direct investment Asia Pacific Economic Cooperation (APEC) assignment problem Association of Southeast Asian Nations (ASEAN) asymmetric information

bail-ins bailouts balance of payments balance sheet approach/effects

Balassa-Samuelson effect band, basket and crawl (BBC) Bank for International Settlements (BIS) Bank of Japan banking crisis Basel Convention beggar-thy-neighbor policies black market premium Bonn Summit brain drain brain gain brain waste Bretton Woods system bubbles

capital accumulation in open economies capital controls capital flight capital flows to developing countries capital mobility carry trade Central American Common Market (CACM) Central American–Dominican Republic Free Trade

Area (CAFTA-DR) child labor commodity chains commodity-price pegging Common Agricultural Policy common currency common market Common Market for Eastern and Southern Africa

(COMESA)

xiii

Alp

ha

be

tical List o

f En

tries

comparative advantage competition policy competitive advantage conflicted virtue contagion Convention on Biological Diversity Convention on International Trade in Endangered

Species (CITES) convertibility corporate governance corruption countervailing duties currency board arrangement (CBA) currency competition currency crisis currency substitution and dollarization customs unions

debt deflation democracy and development dependency theory deposit insurance development digital divide discipline distortions to agriculture incentives Doha Round dollar standard domestic content requirements dominant currency dual exchange rate

early warning systems Economic Community of West African States

(ECOWAS)economic developmenteconomies of scaleeffective exchange rateeffective protectionelectronic commerceequilibrium exchange rateeuroEurocurrenciesEuropean Central BankEuropean Monetary Union

European Union evolution of development thinking exchange market pressure exchange rate forecasting exchange rate pass-through exchange rate regimes exchange rate volatility exchange rate weapon exchange rates and foreign direct investment exorbitant privilege expenditure changing and expenditure switching export processing zones export promotion

factor endowments and foreign direct investment

fair trade fear of floating Federal Reserve Board Feldstein-Horioka puzzle financial crisis financial liberalization financial repression financial services fixed costs and foreign direct investment footloose production foreign direct investment (FDI) foreign direct investment and exit of local firms foreign direct investment and export

performance foreign direct investment and innovation,

imitation foreign direct investment and international

technology transfer foreign direct investment and labor markets foreign direct investment and tax revenues foreign direct investment: the OLI framework foreign direct investment under monopolistic

competition foreign direct investment under oligopoly foreign equity restrictions foreign exchange intervention foreign market entry forward premium puzzle fragmentation

xiv

free trade areaFree Trade Area of the Americas (FTAA)

gains from tradegenderGeneral Agreement on Tariffs and Trade (GATT)General Agreement on Trade in Services (GATS)Global Environment Facilityglobal imbalancesglobal income inequalityglobal public goodsglobalizationgold standard, internationalgovernment procurementgravity modelsGroup of Seven/Eight (G7/G8)growth in open economies, neoclassical modelsgrowth in open economies, Schumpeterian

models Gulf Cooperation Council

health and globalization Heckscher-Ohlin model hedge funds hedging HIV/AIDS home country bias hot money and sudden stops

illegal drugs trade import substitution industrialization impossible trinity infant industry argument inflation targeting information and communications

technology infrastructure and foreign direct investment intangible assets intellectual property rights intellectual property rights and foreign direct

investment interest parity conditions internalization theory international financial architecture international financial centers

international income convergence international institutional transfer international investment agreements International Labor Organization international liquidity International Monetary Fund (IMF) International Monetary Fund conditionality International Monetary Fund surveillance international policy coordination international reserves intrafirm trade intraindustry trade

J-curve effect joint ventures

knowledge-capital model of the multinational enterprise

labor standards Latin American debt crisis lender of last resort linkages, backward and forward liquidity trap, the location theory Louvre Accord

Maastricht Treaty market access market size and foreign direct investment Marshall-Lerner condition mercantilism Mercosur mergers and acquisitions migration, international migration governance Millennium Development Goals monetary conditions index monetary policy rules monetary versus fiscal dominance money laundering money supply monopolistic competition multilateral environmental agreements multilateral trade negotiations

Alp

ha

be

tical List o

f En

tries

xv

Alp

ha

be

tical List o

f En

tries

multilateralismmultinational enterprisesmultiple currenciesMundell-Fleming model

New Economic Geography New Open Economy Macroeconomics New Trade Theory nondiscrimination nongovernmental organizations (NGOs) nontariff measures nontraded goods North American Free Trade Agreement (NAFTA) North-South trade

offshore financial centers oligopoly optimum currency area (OCA) theory Organisation for Economic Co-operation

and Development (OECD) Organization of the Petroleum Exporting Countries

(OPEC)original sinoutsourcing/offshoring

parallel imports partial equilibrium models peso problem petrodollars, recycling of petroleum pharmaceuticals Plaza Accord political economy of policy reform political economy of trade policy pollution haven hypothesis poverty, global primary products trade proximity-concentration hypothesis purchasing power parity

quantity theory of moneyquotas

real exchange rateregional development banks

regionalism remittances reserve currency revealed comparative advantage Ricardian model rules of origin

safeguards sanctions sanitary and phytosanitary measures seigniorage sequencing of financial sector reform shipping Smithsonian Agreement smuggling social policy in open economies South-South trade sovereign risk sovereign wealth funds special and differential treatment special drawing rights specific-factors model speculation spillovers steel sterilization structural adjustment subsidies and financial incentives to foreign direct

investment Swan diagram

tariff-cutting formulas tariff escalation tariff rate quotas tariffs technical barriers to trade technological progress in open

economies technology licensing technology spillovers temporary movement of natural persons terms of trade textiles and clothing time inconsistency problem Tobin tax

xvi

trade and economic development, unions and foreign direct investment international United Nations Conference on Trade

trade and the environment and Development trade and wages Uruguay Round trade costs and foreign direct investment trade facilitation vehicle currency trade in services vertical versus horizontal foreign direct investment Trade Policy Review Mechanism trade-related capacity building Washington consensus trade-related investment measures (TRIMs) World Bank transfer pricing World Economic Forum transfer problem World Intellectual Property Organization transition economies World Trade Organization Triffin dilemma World Trade Organization, accession to twin deficits World Trade Organization dispute settlement

Alp

ha

be

tical List o

f En

tries

xvii