Can you provide an explanation of why GDP matters and what types of policies a country like Canada might use to address problems with economic growth in the context of globalization.

With these sources:

Using Stanford, Economics for Everyone: Chapter 22 (Globalization); Chapter 25 (The Ups and Downs of Capitalism); Chapter 18 (Inflation, Central Banks, and Monetary Policy).

Whiteside, Canadian Political Economy: Chapter 3 by Stephen McBride; Chapter 15 by Mario Seccareccia and David Pringle.

And this text summarization:

The text discusses various aspects of globalization, the role of international organizations like the World Trade Organization (WTO), and differing viewpoints on globalization:

Formation of GATT and the creation of the WTO in 1995: The General Agreement on Tariffs and Trade (GATT) was established in 1947 as a treaty, and in 1995, it evolved into the World Trade Organization (WTO), significantly impacting how global trade is regulated.

What is globalization?:

• Globalization is a concept that may not have a uniform definition for everyone.
• It involves a borderless world where national cultures, economies, and borders are becoming less significant, driven by economic globalization.
• Globalization has multiple dimensions, including a new world economic order, international political organizations (IMF, World Bank, WTO), and global cultures facilitated by technology.
• It is closely tied to the development of world capitalism, particularly since the 1970s.

Inexorable and historical process: Globalization is portrayed as an unstoppable and historical process driven by technological and economic forces, such as the "hollowing out" of traditional structures.

Globalization proponents:

• Suggest that states are losing power and becoming obsolete.
• Argue that globalization is an inevitable and unstoppable process, benefiting everyone through market triumph over government.

The skeptics:

• Counter the idea that globalization is entirely new by highlighting its historical roots.
• Challenge the notion that states are losing power, emphasizing that not all states are equal and that states play a crucial role in globalization.
• Argue against the idea that globalization is solely the triumph of markets over government, suggesting that governments can influence and control it.
• Stress that globalization is not uncontrollable, with states actively regulating it through government policies, business investment, and technology-related decisions.

Canada and globalization:

• Discusses Canada's role as a capitalist, liberal-democratic nation-state within the global political economy.
• Examines the security aspects of Canada's position in the international political economy.
• Explores the constitutionalization of a continental political economy in Canada.

The text discusses the Keynesian paradigm and its evolution into neoliberalism, highlighting key economic ideas and policies:

Keynesian Paradigm:

• John Maynard Keynes (1883-1946) introduced the concept that most unemployment is involuntary and stems from insufficient aggregate demand.
• He emphasized the importance of managing aggregate demand, which comprises the desire to consume and the ability to pay, to achieve full employment.
• Keynesian policies involve government intervention through adjusting its spending or stimulating private sector consumption and investment to maintain full employment.

Goals of Economic Policy:

• Pre-Keynesian laissez-faire policies often viewed unemployment as a problem that the market could solve, discouraging government stimulus.
• Today's economic policies often focus on monetary policy, such as controlling interest rates and inflation, with a limited role for government intervention.

Keynesianism and the Tarnished 'Golden Age':

• The postwar economic boom supported the success of Keynesian policies, but the 1970s saw challenges, including profit squeezes for businesses and inflation.
• Neoliberals in the 1970s used these issues to advocate a shift away from Keynesianism, arguing that high wages, powerful labor, and low business confidence were obstacles to economic growth.

Neoliberalism:

• Neoliberalism emphasizes laissez-faire principles and a focus on GDP components: consumption (C), investment (I), government spending (G), and net exports (Xn).
• Monetarism centers on controlling inflation through tight government budget discipline.
• Supply-side economics promotes tax cuts for the wealthy and businesses to incentivize savings and investments, believing that cuts for the lower and middle classes may lead to inflation.
• Generous social benefits and strong trade unions are viewed as disincentives to work.

Neoliberalism Core Beliefs and Policies:

• Fiscal discipline, minimizing government budget deficits, and shifting public expenditures from welfare to economic competitiveness.
• Lowering tax rates and promoting economic growth through financial and trade liberalization, the removal of barriers to foreign investment, privatization, and deregulation.

The Competition State:

• The state's role is to position itself as an attractive location for capital, emphasizing neoliberal policies.
• Labor force flexibility is considered a valuable national resource.

Canadian Political Economy (Chapter 15):

• The text hints at the importance of central banking and the role played by central banks during both the Keynesian era and more recent neoliberal monetary policies.
• The government's role in economic crises and stability is briefly mentioned, with a plan to revisit these issues later.