Chapter 4 showed that biogeographic conditions, such as climate systems and access to waterways, have a strong influence on economic development. The relationship between these conditions and economic development can, however, vary across space and time. Some countries are strongly affected by abrupt weather circumstances because of higher dependence on the agricultural sector and/or less availability of insurance. Chapter 15, on the other hand, emphasized the link between food production, rural development, and migration decisions.

Monetary policy aims at stabilizing an economy through central bank management of the money supply to influence aggregate demand. Constraints on the policy framework are imposed by the Trilemma which holds that policymakers cannot have all three of: open capital markets; an independent monetary policy; and a pegged exchange rate. Exercise of options varies within the Emerging East Asia region. Hong Kong with its globally integrated financial market pegs its exchange rate to the US dollar giving up discretion over monetary policy. China with its state-dominated economy imposes controls on foreign capital flows allowing separation of monetary and exchange rate policies. Mostly though, the region’s capital markets are open enough that the interest rate and the exchange rate intertwine as instruments of policy. Against external shock, central banks lean against currency volatility, with monetary policy following along. Sterilization of foreign exchange market intervention operates within limited space lest speculative capital flows bet against the central bank. Singapore makes for an interesting case study of exchange rate–based monetary policy.

We now discuss the “deep roots” of economic development by taking a very-long-run perspective. Although this is fascinating, the book is organized such that readers less interested in events that happened hundreds or even thousands of years ago can skip Chapters 3 and 4 without affecting the flow of the argument in the remainder of the book.

Microeconomics focuses on the mechanics of demand and supply and development of the argument that competitive markets achieve efficiency in the allocation of resources. The tools of microeconomics find application in macroeconomics for analyzing markets that pertain to the economy as a whole, specifically, the market for loanable funds in which the interest rate is determined and the market for foreign exchange in which the exchange rate is determined.

Monetary and fiscal policy work in complementary fashion to address internal and external imbalances. The Swan diagram captures the interaction. The model defines four “zones of economic discomfort” based on the four possible combinations of internal overheating versus underperformance relative to GDP growth potential and external overshooting versus undershooting of a current account target. Based on an economy’s position within the Swan diagram, recommendations for expansionary versus contractionary monetary and fiscal policy emerge. In the Malaysian case for the late 2010s, the model yields a recommendation for contractionary monetary policy and expansionary fiscal policy. However, Malaysia at the time did not have the fiscal space to implement such a program. Taking a broader perspective, the conclusion is that Malaysia should address its imbalances as structural in nature rather than relying on countercyclical policy.

This chapter describes the components of the heliosphere system including the interior structure and atmospheric layers of the Sun. The solar wind and interplanetary field are described as is how the heliosphere is formed as a bubble out of the interstellar medium. Coronal mass ejections (CMEs) and cosmic rays are introduced and their impacts on the Earth’s space environment are contrasted. Simple quantitative calculations are described to help estimate the size and speed of events in the heliosphere. The hierarchy of knowledge is introduced to help place information into a conceptual framework through the introduction of Bloom’s Taxonomy.

Macroprudential policy involves regulation and supervision of financial institutions to safeguard stability in the financial system as a whole. The system can become vulnerable to loss contagion even when institutions on an individual basis maintain strong balance sheets. Examples of macroprudential policy instruments include capital and liquidity requirements; limits on credit and leverage; regulation pertaining to borrowers, for example loan-to-value ratios; and special requirements for systemically important financial institutions. Systemic risk tends to build in boom times and subside in busts. These fluctuations tend to be amplified in the Emerging East Asia setting by global capital flows. Macroprudential policy aims at moderating the fluctuations. Analysis is complicated by the diversity of instruments available and the complexity of the regulation involved. Korea’s relatively long history of experience offers opportunity for study.

The U.S.–Latin American relationship has never been easy. A combination of wars, invasions, occupations, mutual suspicion (and occasionally open dislike and insults), dictatorships, and/or differences in ideology represents a consistent obstacle to strong national friendships. However, relations have not always been negative. Periodically, Latin American political leaders have worked closely with the U.S. government in a spirit of partnership, and the United States has also periodically offered new initiatives and shown a willingness to establish a positive and friendly relationship. How, then, can we make sense of it all? This book has three intertwined purposes, focusing on theory, political history, and research. It examines four prominent approaches to international relations: realism, dependency theory, autonomy, and liberal institutionalism. However, there is no perfect theory, and the strengths and weaknesses of each are discussed. Students are strongly encouraged to engage different theories of international relations in the light of empirical evidence. Resources are also offered for further study of chapter topics.