Lesson 2: The Globalization

Of Worlds Economic
What is Economic Globalization?

• One of the main dimension of globalization.

• It is the intensification and stretching of economic interrelations around the
globe.
• It encompasses such things as the emergence of a new global economic order,
the internationalization of trade and finance, the changing power of transnational
corporations, and the enhanced role of international economic institutions.
• It is the increasing economic integration and interdependence of national,
regional, and local economies across the world through An intensification of
cross-border movement of goods, services, technologies and capital.
The International Momentary Fund (IMF)

• It is an international organization located in Washington, D.C

• It consisting of 189 countries working to foster global monetary
cooperation, secure financial stability, facilitate international trade,
promote high employment and sustainable economic growth, and
reduce poverty around the world while periodically depending on
World Bank for its resources.
International Trading System

• It is the exchange of capital, goods, and services across international

borders or territories.
• When trade takes place between two or more nations factors like
currency, government policies, economy, judicial system, laws, and
markets influence trade.
• World Trade Organization (WTO)
- The organisations work towards the facilitation and growth of
international trade.
Examples of IMF in history- Uttarapatha, Silk Road, Amber Road, scramble for
Africa, Atlantic slave trade, salt roads
 Silk Road
• The oldest known International trade route.
• A network of pathway in the ancient world that spanned
from China to what is now Middle East and to Europe.
• It was called as such because one of the most profitable
products traded through this network was Silk.
Deniss O. Flynn & Arturo Giraldez
- Historians that said the age of globalization began when “all
important populated continent began to exchange products
continuously both with each other directly and indirectly via other
continents- and in values sufficient to generate crucial impacts in all
trading partners”.
Galleon Trade
• Were Spanish trading ships which for two and a half centuries
linked the Philippines with Mexico across the Pacific Ocean,
making one or two round-trip voyages per year between the
ports of Acapulco and Manila, which were both part of New
Spain.
• It is also te period were high tariffs imposed, forbade colonies to
trade with other nations, restrict trade routes, and subsidized it’s
export.
• Gold Standard
- It’s goal was to create a common system that would allow for
more efficient trade and prevent isolation of mercantilist era.
- Establish a common basis for currency prices and fixed
exchange rate – all based on value of gold.
Greatest Depression
• The Global economic crisis during 1920 to 1930.
• The worst and longest recession ever experienced by the Western
world.

Flat Currency
• Currencies that are not backed by precious metal and whose value is
determined by the cost relative to other countries.
• This system allows the government to freely and actively manage
their economies by increasing or decreasing the amount of money in
circulation as they see fit.
Neolibiralism and It’s Discontent

• Neolibiralism or Neo-libiralism –Is the 20th-century resurgence of

19th-century ideas associated with laissez-faire economic
liberalism and free market capitalism.
• It refers to a system of economic and political thought that
prioritizes the deregulation of national economies, the private
ownership of infrastructure and the extension of marketplace
ideas to many domains of life including education, healthcare
and even personal relationships.
Keynesianism

• During this period, government poured money into their economies,

allowing people to purchase more goods and, in the process, increase
demand on the product.
• This Theory went that, as price increase, companies would earn more,
and would have more money to hire workers.
• Stagflation
- Phenomenon in which decline in economic growth and
employment(stagnation) takes place alongside a sharp increase in
price(inflammation).
Washington Consensus

• It’s advocates pushed for minimal government spending to reduce

government debt.
• They also called for the privatization of government-controlled service
like water, power, communication, and transport, believing that the
free market can produce best result.
• They also pressured, particularly in the developing world, to reduce
tariffs and open up their economies, arguing that it is the quickest
way to progress.