This document includes the summarized content of Economics of Globalisation (ECON113) from the Singapore Management University (SMU). Week 1 - 3 include many theories from economists. Week 4 includes policy that can affect international trade. Week 5 discusses trade wars. Week 6 discusses China and...
ECON113: Economics of Globalization
EXAM PREPARATIONS
,Part 1. What makes countries and people trade?
Many theories from economists [week 1, 2 & 3]
Globalization
= greater interdependence between countries and their citizens
Increased internationals flows of:
- Economic elements
→ goods and services
→ people
→ investments in equipment, factories, stocks, bond
- Non-economic elements
→ culture
Driving forces:
- Technological change
- Multilateral trade negotiations (GATT/WTO)
- Continuing liberalization of trade and investment
- Widespread liberalization of investment transactions
- Development of international financial markets
First Wave of Globalization
1870 - 1914
- Decreases in tariff barriers
- Technological developments
→ declining transportation costs
→ driven by European and American businesses and individuals
- Ended by WWI
Second Wave of Globalization
1945 - 1980
- Nationalism motivated globalization
- Falling transportation costs increased trade
- Trade liberalization not uniform
→ mainly developed countries participated
→ manufactured goods were included
Most developing countries did not participate in growth of global trade in
manufacturing and services
→ continuing trade barriers in developed countries
→ unfavorable investment climates
→ antitrade policies of developing country governments
, → dependence on agricultural and natural-resource products
Developing countries as group left behind
Import Substitution
An industrialization strategy that used to be popular in the 50s and 60s (Mexico, Brazil, India,
etc.)
- If there are fertilizer imports, there should be a fertilizer factory
- Extensive use of trade barriers to protect domestic industries from import competition
- Rationale
→ exports from developing countries cannot compete with advanced countries,
especially with the high trade barriers
→ protect the infant industries will allow them to grow to a size where they can
compete with the developed countries
- Disadvantages
→ no incentive to increase efficiency (why improve if there’s no comparison)
→ discriminating against all other producers, including potential exporting ones
→ very difficult to remove restrictions once in place (industries are too dependent)
→ breeds corruption (the government “decides” which industries can be successful)
Abandoned by most countries by mid-80s
Third Wave of Globalization
1980 to present
- Many developing countries have participated (China, India, Brazil)
- Other developing countries; increasingly marginalized in world economy
- Significant international capital movement
- Global supply chain
→ production separated into stages or tasks that are undertaken in many countries
→ international production network
- Outsourcing
= subcontracting of work to another firm or the purchase of components for a product
rather than manufacturing them in order to reduce costs
Measuring Globalization
Openness index
- Rough measure of the importance of international trade in a nation’s economy
- Nation’s exports and imports as a percentage of its Gross Domestic Product (GDP)
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur lennerts0202. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €6,89. Vous n'êtes lié à rien après votre achat.
