Globalisation Flashcards
Globalisation
Opening of international boarders to the flow of trade, investment, immigration, information and technology
What caused globalisation to rise?
WTO, internet, fall of communism
WTO
World Trade Organisation
International competitiveness
The degree to which a country can produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the long term
Real unit labour costs
Changes in wages relative to productivity
Productivity
How much output can be produced from a given amount of input, total production (GDP)/hours worked
When do real unit labour costs fall?
Productivity rises, wage costs fall
TWI
Trade weighted index measures change in value of currency relative to major trading partners
What major event led us to realise the importance of globalisation?
GFC 2008
What does globalisation imply?
Opening up international borders to flow of workers, trade, tourism and investment
What is globalisation to economists?
Triumph of free trade and competitive markets over protection and restricted markets
What has WTO declared the most significant economic event of our time?
Rise of developing world, giving them new access to markets/technology/investment
4 trends affecting relationship between trade and development
Economic growth of many developing countries
Growing integration of global production through supply chains
Higher prices for agricultural goods and natural resources
Increased interdependence of the world economy
What is globalisation blamed for?
Poverty, inequality, environmental pollution
How much of Australia’s GDP is exports?
~20%
What does Australia import a lot?
Capital goods, machinery, motor vehicles, consumer goods
What are the top 4 ranked global exports?
Fuel
MNC
Multinational corporations
How are real unit labour costs measured?
GDP/hours worked
PPP
Purchasing power parity theory, identical goods should cost the same in different countries
How much of world exports is tourism?
30%
Why does Australia heavily rely on foreign investment?
To complement our low domestic savings
NAFTA
North American Free Trade Agreement
ASEAN
Association of South East Asian Nations
Intermediate goods
Goods within the supply chain
Trade blocs
Nations that trade together
Absolute advantage
producing more of a good and at a greater efficiency than competing nations, complete control over product and other nations shouldn’t bother competing
What does Australia export?
Natural gas, bauxite, iron ore, coal
WTO aims
Liberalising international trade
