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    Lecture 2 The Global Economy

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    Nessy Nicholle Satruion
    This document summarizes a lecture on economic globalization. It defines economic globalization as the increasing integration of economies through cross-border movement of goods, services, and capital according to the IMF. It identifies three main actors that facilitate economic globalization: the international monetary system, nation-states, and global corporations. The document provides historical examples of early international trade networks like the Silk Road and discusses the shift from the gold standard to the Bretton Woods system and challenges to neoliberalism.

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    Lecture 2 The Global Economy

    Uploaded by

    Nessy Nicholle Satruion
    9 views19 pages
    This document summarizes a lecture on economic globalization. It defines economic globalization as the increasing integration of economies through cross-border movement of goods, services, and capital according to the IMF. It identifies three main actors that facilitate economic globalization: the international monetary system, nation-states, and global corporations. The document provides historical examples of early international trade networks like the Silk Road and discusses the shift from the gold standard to the Bretton Woods system and challenges to neoliberalism.

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    Lecture 2 the Global Economy

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    This document summarizes a lecture on economic globalization. It defines economic globalization as the increasing integration of economies through cross-border movement of goods, services, and capital according to the IMF. It identifies three main actors that facilitate economic globalization: the international monetary system, nation-states, and global corporations. The document provides historical examples of early international trade networks like the Silk Road and discusses the shift from the gold standard to the Bretton Woods system and challenges to neoliberalism.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    9 views19 pages

    Lecture 2 The Global Economy

    Uploaded by

    Nessy Nicholle Satruion
    This document summarizes a lecture on economic globalization. It defines economic globalization as the increasing integration of economies through cross-border movement of goods, services, and capital according to the IMF. It identifies three main actors that facilitate economic globalization: the international monetary system, nation-states, and global corporations. The document provides historical examples of early international trade networks like the Silk Road and discusses the shift from the gold standard to the Bretton Woods system and challenges to neoliberalism.

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    Lecture 2:

    The Global Economy


    GEC103: The Contemporary World
    Prepared by: Ms. Jovell Nicole S. Along
    Learning Objectives
    Define economic globalization

    Identify the actors that facilitate economic


    globalization

    Articulate a stance on global economic


    integration

    2
    Economic
    Globalization
    Subtopic 1
    Economic
    Globalization

    • According to International
    Monetary Fund (IMF) it is the
    increasing integration of
    economies around the world
    through the movement of
    goods, services, and capital
    across borders.

    4
    According to IMF,
    the value of trade as
    a percentage of
    World GDP
    increased from
    42.1% in 1980’s to
    62.1% in 2007

    5
    Values and
    growth rates of
    world trade in
    goods and
    services in 2020

    6
    Foreign Direct Investment

    A type of investment in which a company established a


    business in another country for the production of goods
    and services and still takes part of managing of that business.

    9/4/20XX Presentation Title 7


    International
    Trading
    Systems

    Subtopic 2
    Silk Road
    A network of trade routes
    connecting China and the
    Far East with the Middle East
    and Europe.
    9
    So when did full economic
    globalization begin?

    • According to historians Dennis Flynn and Arturo Giraldez, the age of


    globalization began when,
    “All important populated continents began to exchange products
    continuously- both with each other directly and indirectly via other
    continents – and in values sufficient to generate crucial impacts on all
    trading partners.”

    10
    Galleon Trade
    • Connected Manila
    and Mexico; the first
    time that Americas
    were directly
    connected to Asian
    trading routes.

    11
    The Actors that facilitate
    Economic Globalization
    1. International Monetary Subtopic 3
    System
    2. Nation-State
    3. Global Corporations
    1. International
    Monetary System
    • The Gold Standard
    - European nations and US shifted to
    gold at the international monetary
    conference in Paris
    - It was believed to guarantee a non-
    inflationary, stable economic
    environment, a means for
    accelerating international trade.
    - A common basis for currency prices
    and a fixed exchange rate system, all
    based on the value of gold.
    13
    • The Bretton Woods System
    - The Bretton Woods agreement of
    1944 established a new global
    monetary system.
    - Countries promised that their central
    banks would maintain fixed
    exchange rates between their
    currencies and the dollar.
    - In 1971, the United States suffered
    from massive stagflation, thus the
    collapsed of the Bretton Woods
    System.
    14
    • The Bretton Woods System
    (cont.)

    • Two Financial Institutions were


    created:
    a. International Bank for
    Reconstruction and
    Development (IBRD) or now
    known as World Bank
    b. International Monetary Fund
    (IMF)

    15
    The challenge to neoliberalism

    • Neoliberalism is rooted in the classical liberal ideals of


    Adam Smith (1723–90) and David Ricardo (1772–1823),
    both of whom viewed the market as a self-regulating
    mechanism tending toward equilibrium of supply and
    demand, thus securing the most efficient allocation of
    resources.
    • They also advocated the elimination of tariffs on imports
    and other barriers to trade and capital flows between
    nations.
    16
    2. Nation-State

    Acts as a mediator between the effects of


    globalization and the national economy.

    Ex: China and US Trade War

    17
    3. Global Corporations

    These companies work to have a foothold in a large


    number of countries.

    A global company is generally referred to as a


    multinational corporation (MNC).

    -Ex: Nestle, P&G, Coca-Cola


    18
    A. In 1 to 2 paragraphs, answer the question based
    on what you were able to learn and understand on
    the topics discussed. (10 points)

    1. Does economic globalization unites or further


    divides the world?

    Activity 1

    19

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