Section 1 Flashcards
What is Economic Internationalization, what is its indicator
extend to which national economies interact with one another through the exchange of goods and services, focus on extension of economic activities across boundaries Indicator= Trade/GDP ratio
Describe Economic Globalization
Set of processes through which economic activities are increasingly interconnected. Functional integration of production activities - global assembly lines
What are the 3 competing explanation/theories in terms of economic globalization
- Hyperglobalizers: Emergence of new world order, decreasing role of the nation sate, “borderless economy”, distance doesn’t matter 2.Skeptics: Economic globalization=overblown, a myth or mislabeling of internalization, nothing new ! 3.Transformationalists: Globalization= non-static, uneven patterns of development, national economic space is not equal territorial borders
What are the first two key phases of international trade ?
- 1500-1800 (early commercial expansion) -Discovery -Mercantilism and protectionism -High values goods 2.1800-WW1 (Rise of colonial economy) -Trade-boom - bulk staples - driven by free trade, migration, innovation
What is new in our global economy
- More of everything -Trade capital flows comparable to 19th century -Two key differences : -type of trade (composition) and capital flows -Market integration- breadth and depth
What are the 20thc drivers of commercial integration
Important changes -Trade reliberalization -Liberation of capital market -GATT/WTO, IMF (international money fund) , trade blocks: EU/NAFTA =international governance -unilateral world to multilateral worlds -Greater degree of connectedness -much more trade
What are consequences of a more global economy
- Loss of domestic control over nation’s own economy (-race to the bottom, competition to attract capital -MNCs and environmental regulations) 2. Increased intra-firm trade (which are tricky to regulate) 3. Job opportunities vs Job losses (relocation of production activities’ who wins, who looses?)
Describe Economic Globalization
1- A set of dynamic, non static processes 2-Both spacial and temporal dimensions i) stretching (expansion of economic activity) ii) intensification (growing magnitude of connectedness) iii) speeding up (increased velocity of transaction) 3-Magnified local-global impacts , unfolds over multiple geographic scales
economic systems are _______
scale independent, they can exist on any scale
Production possibilities frontier implies
-tradeoff -valuation -preferences -opperation costs -economic growth (producing more goods)
Describe economic agents
individuals, coop, firms, any entity making production/consumption decision
Describe economic institutions
Set of norms and rules that govern commerce, trade, production and consumption- all around, they are everywhere guiding us, the world is built on institutions they guide incentives
what are factors of production what are factors endowment
Land, Labor, Capital Natural resources, climate, labor force, capital/technology
Explain private goods and public goods
private goods = excludable, rivalrous public goods= non excludable, non-rivalrous *markets usually emerge from private goods
Scarcity can be _______ or _________ (the types of scarcity)
natural socially constructed
Describe a market
- facilitate exchange -its an institution not a place - Role of market = allocate scarce resource efficiently -ex= how to allocate oil ? have an auction, so a market -types of market = labor, land, commodity, etc
Define the structure of a market
-Government at the centre - 4 actors = resource market (top), product market (bottom) ,businesses (left), households (right)
What are the four types of economy
- Traditional economy = face to face exchange, no “markets”, subsitience focus, social norms guiding exchanges, gifts
- Market Economy = supply and demand, private ownership of resspurces, profit based
- Command Economy= governement own most buisiness, lack of competition, based on population needs
- Mixed Economy = mix of market and command, both pricate and public, governemnt guides ans provides services
Define Political Economy
Study of relationship between economy and political institutions
profit focus ? social focus ?
the variation (which are observed) in interaction influences society
What are the 2 drivers of economic growth
- New ressources (population, natural ressources..)
- Technological Change
Describe GDP
Gross Domestic Product
Market value of goods and services produced withing a country’s border in a year
Does not include intermidient goods (ex electricity)
What is real GDP
- GDP calculated with inflation
what is GNP
Gross National Product
market value of goods and servies produced by national of a given country in a year (nation=citizentship)
Luxembourg example = GDP 1/2, GNP 1 , why ? others countries produce in the country and luxembourg produces more abroad ?
What are the 3 economic sectors
Service
Agriculture
Industrial
Gdp allows to _______ and is very useful to __________
track the development
understand the structure of an economy
What are the problems with GDP (5)
- Does not take into account Informal sector/underground economy (which can be important)
- Does not take into account unpaid work (housework, volunteer, which is a bias against developping countries)
- Does not differietiate Welfare enhancing vs Welfare reducing activities (example: pronatal care VS oil spill clean up)
- Does not capture the distribtuion of income (small groups of ppl capturing all income)
- Comparisons with developping countries (where cost of living is very different)
What are two alternate income measures (ways to adjust the purchasing power basis) , explain them
- PPParity: portays exchange rates and purchasing power– as if it was sold inthe US – allows better comparision– base line = US
- GNI (Gross National Income): alternate measure to GDP/GNO–income received through the goods and services – captures remittance and aid–for large countries, its similar to GDP– Whereas GDP only counts income received from domestic sources, however, GNI includes net income received from abroad
GDP is not a measure of ________ , the relation between GDP and ________ or _______ is not really accurate
quality of living
life expectency
years of school
Growth is _________ for development
necessary but not sufficient
What are the milleniums goals , what does it portrays
to eradicate extreme poverty and hunger;
to achieve universal primary education;
to promote gender equality and empower women;
to reduce child mortality;
to improve maternal health;
to combat HIV/AIDS, malaria, and other diseases;
to ensure environmental sustainability; and
to develop a global partnership for development.
growth is not enough
What are some alternate, new measures of development
- HDI (human development index) = measure capturing education and health and income – measure on 1– easy to map
- GNHI (gross national happiness indez) = objective and subjective index with all sorts of values
- GPI (Genuine progress index)= rethinkink what is progress– takes into account sustainability, ajusted income, seprating welfare and has 24 pieces *GDP can cancel whiel GPI doesnt
How to acess income inequality + what is GINI
- share income
- Lorenz curve (capures distribution with the curve)
GINI : a statistical measure of the degree of variation or inequality represented in a set of values, used especially in analyzing income inequality. G=(a/a+b), so the higher the less equal, the world GINI is 0.56
What are the industrial location key factors (7)
- Acess to input (raw materials, energy) [eg= aluminium production in QC because electricity need + cation= no absolute correlation, japan or congo example]
- Availability of labour (skills, qualifications) [eg= RBC call center in N-B because bilingual]
- Processing costs (land, labor, capital)
- “Pull” of the market (is it important to be close to consumers?)
- Transfer cost of alternative locations
- Institutional and cultural factors (tax..)
- Behavioural consideration (objectives/constraints of decision makers, taking distance out of competition equation) [ex: cluster of fast food because consummer basin]
Describe industrial structure of economies (the 4 types of activities)
i) Primary activity= concerned directly with natural ressources (fishing, mining)
ii) secondary act.= processing or transformation of raw material into manifactured goods
iii) Tertiary act.= sale and exchange of goods and service (Zara, club video)
iiii) Quartenary act.=handling of knowlegde and information (bank)
Describe Light and Heavy industry
Light= shoes, glasses, goods
Heavy= intermidiate good (gonna be transfered again), capital intensive
Describe the major industrial regions in North America + the shift
Roots of industrial revolution in manufacturing belt
Canals, Railroad, transportation network helped with the developpement of the Frost Belt (rust belt?)
Detroit = cars , motors
Boston= formally light manifacture now electronics
New-York=apparel industries, processed food, book publishing
New-Jersey=Pharmaceutical
Chicago=Trains, meat packing
Pittsburgh= steel
Philadelphia, Baltimore= heavy manifacturing (steel, chemicals)
Upstate NY= chemicals, optical devices
Cleveland and Akron = tires
Southern Ontario = cars, steel, chemicals
Montreal= aerospace, aluminium, pulp and paper
//
Shift = frost belt ot sun belt
1960-70s : technology emergence finding new locations (sun belt)
Southern Cali = biggest hub for manifacturing, mixed light and heavy, shift due to Douglas and Lockheed plants, developpemnt of biotech
San Fran= sillicon valey
Seattle- Tacoma= aircraft, computers
Tech. Triangle= Raleigh-Durham-Charlotte software
Texas= computer-electronics
Describe Europe Major Industrial Regions
France: Ile de France= pharma - _Lyon=_Textile- _Nice=_Sophia Antipolis,high tech
Germany: Ruhr-Rhine= steel-_Saxony=_ light manifacture-_Stuttgart=_automobiles
Italy: 3rd Italy= artisanal, clothing, high precision prod. - Golden Triange= classic mix of light and heavy
Spain: Barcelona= hard, light, high tech
Uk: M4 corridor= tech. - Manchester= heavy
Describe Russia Major Industrial Regions
Volga region = relocated industries , steel mineral
Central industrial region (Moscov) = Heavy
Ural region= heavy, forestry, pulp/paper
Kuzbas= secondary
KRASNOYARSK-BAYKAL=?
Far East= port
Depict the bread and wine example
slope = ____
slope = opportunity cost
Explain the Antlantic Triangle + why did fall appart
fell appart because of : 1. ships travels
- Slave abolition
which both led to direct trade
