Lesson 2 Flashcards
refers to the expanding interdependence of world economies.
Economic Globalization
The flow of international capital can be observed in?
FDI (Foreign Direct Investment)
a type of investment in which a company establishes a business in another country for
production of goods and services and still takes part in the management of the business.
FDI
IMF
International Monetary Fund
4 interconnected dimensions of economy
(1) the globalization of trade of goods and services;
(2) the globalization of financial and capital markets;
(3) the globalization of technology and communication;
(4) the globalization of production.
❖ Formerly known as General Agreement on Tariffs and Trade (GATT)
❖ Deals with the rules of trade between nations, settles trades disputes and conduct straight
negotiations. e.g. (May 2013)
❖ Ensures that trade flows as smoothly, predictably and freely as possible(
WORLD TRADE ORGANIZATION (WTO)
The role of nation-state as manager of the national economy is redefined by globalization (Boyer
and Drache, 1996).
➢ Nation –states still acts as a buffer to negative effects of globalization.
➢ Midwives of globalization (Brodie, 1996)
. Nation – state
Nation – state has ceased to exist as the primary economic organization unit in the global
market. Filipino consumers prefer H&M, Uniqlo, Fedex etc. – transforming national economy to
global one
Global corporations
refers to internationally agreed rules, conventions and institutions for facilitating international
trade, investments and flow of capital among nation – states.
. International Monetary System
– fixed exchange rate regime with gold as the only international reserve and
participating countries determine the gold content of national currencies
Gold Standard
US dollar was only the convertible currency. Thus it was agreed by
44 countries to adopt the gold exchange standard.
Bretton Woods System
now known as WORLD BANK ?
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD)
s responsible for post war reconstructions
Increases in economic growth and decreases poverty in developing countries.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD)
promote international financial corporation and strengthen international trade
INTERNATIONAL MONETARY FUND (IMF)
established after the collapse of Bretton Woods
-successful in the stabilization process of exchange rates
-founded EMU (European Economic and Monetary Union)
European Monetary System (EMS)
