Lecture 3: Global Integration

Question 1

Globalisation

Answer 1

The international integration of markets in goods, services, and capital.

Question 2

Globalisation can be measured in two different ways:

Answer 2

1. International economic flows - Economic size / growth, international trade flows, FDI, international portfolio investment
2. Foreign economic policy: changing tariffs and non-tarriff barriers to trade and foreign portfolio investment and fDI

Question 3

Three most important causes of globalisation

Answer 3

trade, multinational production and international finance

Question 4

The uniqueness of contemporary market integration is marked by three points:

Answer 4

1. International trade is dominated by manufacturers
2. Trade in services is important nowadays
3. Increase in multinational production

Question 5

MNE

Answer 5

A business that has direct investments abroad in multiple countries.

Question 6

Garret describes 4 views of the big picture on globalisation

Answer 6

1. Nothing new is happening
2. Technological determinism (strong form): international finance - technological revolution cannot stop global financial flows
3. Technological determinism (weak form): a technologically determined view of trade liberalisation is weak.
4. Political construct: government policy is not improving the economic condition of society as a whole.

Question 7

Garret states three economic dimensions of globalisation

Answer 7

International trade (market exchange), FDI (direct investment) and international finance (portfolio investment)

Question 8

There are three independent trends driving globalisation

Answer 8

1. technological innovation
2. growing international economic activity
3. liberalisation of foreign economic policy