Very Detailed Entire Course Notes w/ Essays & Case Study

Resource Description

Topic one the global economy
International economic integration

The Global Economy

Globalization: the integration between different countries and economies and the increased impact of international influences on all aspects of life and economic activity
Economic integration: the liberalization of trade between two or more countries or many countries within a region

‘Global economy’ refers to the fact that individual economies are becoming increasingly linked with each other economically; changes in a single economy can have ripple effects on other economies

Advanced Economies (39)
⦁ High levels of economic development
⦁ Per capita income over US$30,000pa
⦁ Market based- free enterprise economic systems of resource allocation and limited gov intervention
Emerging and Developing Economies (153)
⦁ Raising rate of economic growth and development
⦁ Have lower per capital incomes and living standards than advanced
⦁ Many are sustaining rapid economic growth and development (BRICs)

Gross World Product

⦁ Size of the global/ world economy is measured by the IMF through the compilation of data which values countries’ GDP at PPP (purchasing power parities)
⦁ World GDP at PPP is the total market values of all goods and services produced by all countries over a given time period (us 1 year) adjusted for national variations in prices and different exchange rates
⦁ World GDP at PP is valued in USD as it is the world’s reserve currency
⦁ 2016 – advanced dominate production, but emerging have sustained higher rates of growth

Globalisation
Trade in goods and services

Gross world product (GWP): sum of total output of all goods and services by all economies in the world over a period of time.
World trade organization (WTO): organization of 164 member countries that implements and advances global trade agreements and resolves trade disputes between nations
Composition of trade: mix of what goods and services are traded
Trade: sale of goods and services across national borders
Imports: goods and services a country buys from another country
Exports: goods and services a country sells to another country
⦁ Important indicator of globalisation as it is a measure of how goods and services produced in an economy are consumed in other economies around the world
⦁ Trade in goods and services has grown rapidly in recent decades
⦁ US$6.2 trillion in 1987 to over US$41.7 trillion in 2017
⦁ Size of GWP is now over 50 times its nominal level in 1960, volume of world trade has grown to 125 times its 1960 level
⦁ Annual growth in value of trade around twice level of world economic growth
⦁ Growth of global trade contracted faster than world economic output – greater volatility of trade
⦁ High volume of global trade economies don’t produce all items they need, inefficient; import
⦁ Global trade has grown due to new technology in transport and communications – reduced cost of moving goods between economies and providing services to customers in distant markets
⦁ Expected in long term that finance and communication services will be fastest growing category
⦁ Direction of trade flows changed – reflects changing importance of different economic regions

Global Trade – Exports
⦁ Manufactures (53%)
⦁ Commercial services
⦁ Food and agriculture
⦁ Fuels and minerals