L1077 Understanding Global Markets

Seminar 1: What is New About the Current Wave of Economic Globalisation?

Please read the articles below and prepare the questions below before coming to the
seminar. You can access articles free online via Sussex Library (go to electronic library,
online journals).

Essential Reading 1:

IMF (2008) Globalization: A Brief Overview. Available at:
http://www.imf.org/external/np/exr/ib/2008/053008.htm

Essential Reading 2:

Jovanovic, M. (2010) Is Globalisation Taking us for a Ride?, Journal of Economic Integration,
Vol. 25, no. 3, September, pp. 501-549

Questions for seminar discussion

1. What is the central message to emerge from Reading 1 (IMF 2008)? What evidence is
provided to measure globalisation? Is globalisation beneficial according to the IMF?
Central Message
A perennial challenge facing all of the world's countries, regardless of their level of
economic development, is achieving financial stability, economic growth, and higher
living standards.
Common denominations include investment (particularly foreign direct investment), the
spread of technology, strong institutions, sound macroeconomic policies, an educated
workforce, and the existence of a market economy. Integration into the global economy
too.
It refers to the increasing integration of economies around the world, particularly
through the movement of goods, services, and capital across borders.
Evidence / Citizens Benefit
Access to a wider variety of goods and services, lower prices, more and better-paying
jobs, improved health, and higher overall living standards.
The percentage of the developing world living in extreme povertydefined as living on
less than $1 per dayhas been cut in half.
The value of trade (goods and services) as a percentage of world GDP increased from
42.1 percent in 1980 to 62.1 percent in 2007.
Foreign direct investment increased from 6.5 percent of world GDP in 1980 to 31.8
percent in 2006.
The stock of international claims (primarily bank loans), as a percentage of world GDP,
increased from roughly 10 percent in 1980 to 48 percent in 2006.
1

The number of minutes spent on cross-border telephone calls, on a per-capita basis,
increased from 7.3 in 1991 to 28.8 in 2006.
The number of foreign workers has increased from 78 million people (2.4 percent of the
world population) in 1965 to 191 million people (3.0 percent of the world population) in
2005.




2. What is the central thesis being put forward in Reading 2 (Jovanovic 2010) ? What is the
central thesis put forward in this reading? What evidence is used to support this thesis?

3. Of the two readings, which one do you find to be more persuasive? Give full reasons for
your answer.

4. What is new about the current wave of economic globalisation?

Further reading

Dicken, Peter (2011) Global Shift, 6
th
edition. London: Sage. Chapters 1 and 2.

Nayyar, Deepak (2006) 'Globalisation, history and development: a tale of two centuries',
Cambridge Journal of Economics, Vol. 30, pp. 137-159.

Stiglitz, J. (2006) Making Globalization Work, London: Penguin. Preface & Chapter 1.

Subramanian, A. and Kessler, M. (2013) The Hyperglobalization of Trade and Its Future.
Working Paper Series WP 13-6, Pearson Institute of International Economics. Available
online.

Wolf, M. (2004) Why Globalization Works. London: Yale University Press. Chapters 6, 7 and
8.