1. The global economy Flashcards
Definition of the global economy
The global economy is made up of economies of individual countries which are all linked to each other and changes in a single economy can have ripple effects on others. Examples: GFC – America fell into a recession, leading to the rest of the world entering a recession.
Advanced economies
the high income, industrialised countries within the world (America, UK). The G7: a group made up of the US, UK, Japan, France, Germany, Italy and Canada. They accounted for 29.7% of world GDP and 33.4% of world exports in 2019 but only 10.2% of the worlds population.
Newly industrialised countries
countries that are in transition from being developing countries towards becoming high-income countries. e.g. South Africa, Brazil
Developing countries
economies with low levels of living standards and which are struggling to achieve high levels of growth and industrialisation. e.g. Argentina
Transition economies
economies that were formerly socialist economies prior to the collapse of socialism in the 1980’s. They are trying to convert to market economies. e.g. Bosnia
Emerging economies
developing countries that have faster rates of growth and better economic prospects e.g. china and India
Statistics for advanced economies
World GDP = 40.3% in 2019
World Population = 14.2% in 2019
Statistics for emerging and developing economies
World GDP = 59.7% in 2019
World Population = 85.8% in 2019
GWP (Gross world product)
The gross world product (GWP) is the combined gross national income of all the countries in the world.
How is GWP measured?
The size of the global economy is measured by the International Monetary Fund (IMF) through the compilation of data which values countries GDP at purchasing power parities (PPP). This means all GDP is measured and compared the same.
GWP in 2019
US$142.006 Trillion
contribution of advanced and emerging, developing economies to GWP
In 2019, advanced economies contributed 40.3% of GWP and emerging and developing economies contributed 59.7% of GWP.
Globalisation
the integration between different countries and economics and the increased impact of international influences on all aspects of life and economic activity.
Definition of trade in goods and services
Trade measures how goods and services produced in an economy are consumed in other economies around the world
Value of trade
The value of exports has increased significantly since 1990 (US$4.3 trillion) to 2019 (US$24.9 trillion)