GLOBAL ECONOMY Flashcards
Refers to the expansion and
intensification of social
relations and consciousness
across world time and world
space (Steger,2013).
Globalization
Multidimensional phenomenon
Globalization
But the economic dimension is
one of the major driving forces
Globalization
A historical process
Economic Globalization
Increasing integration of economies around the world through the movement of goods, services, and capital across borders.
Economic Globalization
Transportation and Communication
Revolution
Economic Globalization
Attributes the growing scale of cross-border trade commodities and services, flow of international capital, wide and rapid spread of technology
(Shangquan, 2000)
Economic Globalization
A process making the world
economy an “organic system” by extending transnational economic processes and relations to more and more
countries and by deepening the economic interdependence among them (Szentes, 2003).
Economic Globalization
Refers to the increasing integration of economies around the world, particularly
through the movement of goods, services, and capital across borders. INTERNATIONAL MONETARY FUND (IMF,2008)
Economic Globalization
globalization began since Homo sapiens began from migrating from the African continent to
populate the rest of the world
Grills and Thompson
considered the Silk Road (Asia, Europe, Africa)the best example for archaic globalization 5,000
years ago.
Frank and Grills
considered the discovery of America by Christopher Columbus in 1492 and the discovery of the direct sea route to India by Vasco de Gama in 1498 as the two(2) greatest achievements
of human history
Adam Smith
the discovery of America by
Christopher Columbus in 1492
discovery of the direct sea route to India by
Vasco de Gama in 1498
spread to Continental Europe
and North America
British Industrial Revolution
economic nationalism and monopolized trade such as the British (1600) and the Dutch
(1602) East India Companies
17th – 19th century
golden age of globalization
because of:
* Relative peace
* Free – trade
* Financial and economic stability
20th century transport revolution
The globalization of trade of goods and services
Attributes of Economic Globalization
The globalization of technology and communication
Attributes of Economic Globalization
The globalization of production
Attributes of Economic Globalization
The globalization of financial and capital markets
Attributes of Economic Globalization
Established in 1995
Eases trade among countries
“ensures that trade flows as smoothly, predictably, and
freely as possible”
World Trade Organization(WTO)
- World Trade Organization(WTO)
- Emergence of China as a major supplier and exporter
of manufactured goods. - Increasing number of business process outsourcing
(BPO)companies in Philippines.
Globalization of Trade of Goods and Services
Emphasizes that various transactions and interactivities that transpire instantly due to the internet and communication technology.
Globalization of Technology and
Communication
It is best illustrated by the
existence of multinational
corporations (MNCs) and
transnational corporations(TNCs).
Globalization of Production
Nation States
Global Corporations
International Financial Institutions
The Actors of economic globalization
states ceased as primary economic organization
hyperglobalists
state that the
role of nation-states as manager of the
national economy is being refined by
globalization.
Boyer and Drache (1996)
claim that nation – states have lost an important element of economic sovereignty.
Neo - Liberals
“Buy Taiwan, hold Italy and sell
France” He compared countries to individual stocks.
Thomas Friedman
The major players of global
economy are the
transnational corporations or TNCs.
company that operates in multiple countries, with each of these operations being relatively independent.
Multinational companies (MNCs)
a company that operates across multiple countries, but unlike an MNC, it does not have a single strong headquarters that controls its global operations. Instead, It have a more decentralized management structure, with decision-making powers distributed across various regions.
Transnational companies(TNCs)
constantly evolving as a result
of outsourcing activity.
Transnational companies(TNCs)
We live in an ___ of outsourcing
age
Firms are subcontracting an
expanding set of activities. Some have become ____ manufacturers, owning designs for so many products but making almost
nothing themselves.
virtual
An international monetary system that established rules for commercial and financial relations among the major industrial states after World War II.
Bretton Woods System
established in 1994 at New
Hampshire, USA, where the United Nations Monetary and Financial Conference was held in July 1944.
Bretton Woods Institutions
Bretton Woods adopted. Various currencies were fixed to the US dollar until 1971.(fixed exchange rate system)
gold - dollar exchange standard
led to the creation of the IMF,
which was established to monitor exchange rates and lend reserve currencies to nations facing balance-of-payments deficits.
Bretton Woods Conference
International Bank for Reconstruction and Development (IBRD) - Bretton Woods
now part of the World Bank Group.
the system faced increasing pressure due to
imbalances in the global economy, particularly the growing U.S. balance
of payments deficits and the accumulation of U.S. dollars in foreign central banks.
Challenge: Bretton Woods System
In 1971, President Richard Nixon announced that the U.S. would no longer exchange dollars for gold, effectively ending the Bretton Woods System. This move led to the
transition to a system of floating exchange rates, where currency values are determined by market forces.
End of the Gold Standard: Bretton Woods System
Who announced in 1971 that U.S. would no longer exchange dollars for gold, effectively ending the Bretton Woods System.
President Richard Nixon
- The creation of IMF and the World Bank
- Set the stage for the development of the modern international monetary system and the rise of global financial markets.
Legacy: Bretton Woods System
Globalization allows a worldwide
distribution of incomes.
Impact of Economic Globalization
Economic globalization reduces
poverty (World Bank,2002).
Impact of Economic Globalization
Globalization creates mutual
dependence between developing and developed countries (Arrighi, 2005).
Impact of Economic Globalization
The sources of goods and services are exploited.
DIVIDES THE WORLD
Economic globalization does not benefit all nations (World Bank, 2002)
DIVIDES THE WORLD
Since these economically poor nation-states depend on industrialized countries for
employment and income, these industrialized countries compensate their labor with cheap cost.
One might observe that the sources of goods and services are exploited.
There is an uneven experience among nations. Workers in TNCs are paid less compared to their counterparts in the
companies’ home countries. This shows how cheap labor is in the Philippines.
Economic globalization does not benefit all nations (World Bank, 2002).
Capitalism under economic globalization creates
INEQUALITY.
The World System Analysis
Capitalism under economic globalization creates
_______
INEQUALITY
1000, 1 : 1
1500 , 1: 2
1820, 1 : 3
1871, 1: 5
WW I, 1: 9
1950, 1: 15
ratio of the richest region’s GDP per capita to the poorest
1000
1 : 1
1500
1: 2
1820
1 : 3
1871
1: 5
WW I
1: 9
1950
1: 15
not influenced uniformly
by economic globalization.
Nation –states
The competitiveness of an
economy and the impact of
economic globalization depend
on the capacity of the nation -
state for political intervention in
order to regulate the
TNCs, IGOs and other market players.
The competitiveness of an
economy and the impact of
economic globalization depend
on the
capacity of the nation -
state for political intervention
