TCW UNIT 2 - Lesson 2.1 PDF

UNIT 2 ECONOMIC GLOBALIZATION DIFFERENCE BETWEEN ECONOMIC GLOBALIZATION FROM ECONOMIC GLOBALIZATION: INTERNATIONALIZATION increasing interdependence of world economi...

UNIT 2 ECONOMIC GLOBALIZATION DIFFERENCE BETWEEN ECONOMIC GLOBALIZATION FROM ECONOMIC GLOBALIZATION: INTERNATIONALIZATION increasing interdependence of world economies ECONOMIC GLOBALIZATION: due to growing scale of trade of global interconnectedness of commodities and services, flow of economies capital, and wide & rapid spread of technologies INTERNATIONALIZATION: individual businesses expanding TWO MAJOR DRIVING FORCES FOR operations beyond domestic borders ECONOMIC GLOBALIZATION KEY DIFFERENCE: 1. THE RAPID GROWTH OF INFORMATION IN Economic globalization creates the ALL TYPES OF PRODUCTIVE ACTIVITIES: environment for internationalization prevalent use of information technology reduced cost of communication and transaction INTERNATIONAL TRADE AND ECONOMIC 2. MARKETIZATION: INTEGRATION shift of previously governed market- based economies into public control EUROPEAN MONETARY COOPERATION KEY NOTE: INTERNATIONAL MONETARY SYSTEM (IMS) forms rules and standards for facilitating Basis of immediate globalization of world international trade economies – Rapid development of helps for reallocation of capital and science and technologies investment DIMENSIONS OF ECONOMIC EUROPEAN MONETARY INTEGRATION GLOBALIZATION: 30-year long process that began in 1960 form of monetary cooperation 1. GLOBALIZATION OF TRADE OF GOODS intended to reduce excessive influence AND SERVICES of US dollar increase flow of products and services led to the creation of Monetary Union and a common currency 2. GLOBALIZATION OF FINANCIAL AND CAPITAL MARKETS EUROPEAN FINANCIAL STABILITY MECHANISM interconnectedness of markets for (EFSM) movement of money, and investments permanent fund created by European Union (EU) 3. GLOBALIZATION OF TECHNOLOGY AND provides emergency assistance to COMMUNICATION members within the union rapid spread of ICT for collaboration 4. GLOBALIZATION OF PRODUCTION break down of production process into stages and distribution of stages across different countries for lower cost  UNIT 2 INTERNATIONAL TRADE & TRADE POLICIES TYPES OF TRADE POLICIES INTERNATIONAL TRADE: 1. NATIONAL TRADE POLICY: exchange of goods, services, and safeguards the best interest of its trade capital across national borders and citizen multi-million-dollar activity central to the Gross Domestic Product 2. BILATERAL TRADE POLICY: (GDP) to regulate the trade and relations more affordable products for consumer between two nations is also the result of competition 3. INTERNATIONAL TRADE POLICY: TRADE POLICIES: defines trade rules under charter for regulations and agreement global economic organizations: defines standards, goals, rules, and o Organization for Economic regulations regarding trade relation Cooperation and Development (OECD) FOCUSES OF TRADE POLICY IN o World Trade Organization (WTO) INTERNATIONAL TRADE o International Monetary Fund (IMF) uphold the interest of developed and TARIFFS: developing nations taxes or duties paid on im/exports WORLD TRADE ORGANIZATION (WTO): TRADE BARRIERS: the only global international org. that measures that government/ public deals with the rules of trade authorities introduce to make imports less competitive than local goods GLOBAL ECONOMY OUTSOURCING: activity that requires search for a partner SAFETY: and relation-specific investments ensures that imports are of high quality governed by incomplete contracts