Globalization and specialisationn Flashcards
Globalization
The growing interdependence of countries on each other
Why has globalisation increased?
Transport (cheaper to transport)
Trade liberalization (less protectionism, neocolonialism)
Technology (communication)
Financial markets (move money)
TNCS (FDI, offshoring)
Globalisation consumer
More choice (larger supply)
Lower prices (comparative advantages)
Loss of culture
Globalisation workers
Trade liberalization, more migration, more workers, increase productivity, increase LRAS
More jobs, in developing countries, low labour costs, Bangladesh
Offshoring, low wages, low standards of living
Globalisation firms
More profit (CA)
Less risk (larger supply chain)
International competition (efficiency)
Globalisation environment
Increased production, increased emissions, climate change
Cap n trade schemes, Paris agreement
Globalisation government
More tax, TNCS, corporation tax
Globalisation growth
FDI, supply side improvement, education, LRAS
Comparative advantage
A country is able to produce a good at a lower opportunity cost to another country
Absolute advantage
A country is able to produce a good cheaper
Limitations of CA
No transport costs
All goods are the same
All factors are mobile
Specialisation and trade advantages
CA gains
Economies of scale, lower prices
Greater choice
More competition, efficiency, lower prices
Specialisation and trade disadvantages
Overdependency
Structural unemployment (Manchester ship building)
Environment
Loss culture
