Def: the increasing interconnectedness of peoples and societies and the interedependence of economies, governments and environments.
Most globalized nations: Small ones mostly, Ireland, Switzerland, Singapore, Netherlands, Sweden, Finland, Canada, Denmark, UK, Norway, US
More globalized, more liberty, less corruption.
More globalized does not narrow the inequality of income.
On balance - beneficial.
Are workers exploited by foreign businesses? Has it been harmful? Is the environment degraded?
Economic Integration: the extent and strength of commercial linkages - real and financial sectors.
Real sector - real goods and services.
Increased with reduction in trade barriers after WWII
Advances in telecommunications
Declines in transportation costs
Financial sector - trading financial assets
Enormous increases in international trade - 5X since 1970 (6%per year)
Most countries increased their SHARE of internationally traded goods between 100 and 800%
Financial Sector
Foreign exchange markets (Foreign exchange in the national)
Turnover 45 times greater than trade in the real sector.
Daily turnover in the foreign exchange markets is more than $1trillion per day!!!!!
FDI (Foreign Direct Investment) - Long-term investment - controlling interest in an enterprise
With deregulation of capital markets and tax harmonization - enormous increases in FDI compared to changes in trade in G & S - approx 30% increase vs 3.5% growth in exports.
Global Markets - Supply and Demand
Demand
Definition - Negative relationship because...
Schedule
Change in quantity demanded
Canges in demand
The list:
Supply
Definition - Positive relationship because...
Schedule
Change in quantity supplied
Change in supply
The list:
The graphs
Market demand and market supply
How prices are determined - equilibrium
Excess quantity supplied
Excess quantity demanded
Producer and Consumer Surplus
Global Markets - excess Qs and excess Qd - imports and exports
