THE GLOBALIZATION OF WORLD

ECONOMICS
 ECONOMIC
GLOBALIZATION
The IMF regards economic globalization
as a historical process representing the result
of human innovation and technological
progress.
 It is characterized by the increasing
integration of economies around the world
through the movement of goods, services
and capital across borders.
 ECONOMIC
GLOBALIZATION
The IMF and ordinary people usually
agree that a drastic change is occurring
throughout the world.
 The increased value of trade as a
percentage of world GDP
 The fast movement of investment all over
the world
 The increased speed and frequency of
trading
 INTERNATIONAL TRADING
SYSTEM

International Trading Systems are not

new. The oldest known international trade
route was the Silk Road, a network of
pathways in the ancient world.
Silk Road was called as such because one
of the most profitable products trade through
the network was silk.
 INTERNATIONAL TRADING
SYSTEM

Traders used the Silk Road regularly from

130 BCE when Chinese Han Dynasty opened
trade to the west until 145 BCE when the
Ottoman Dynasty closed it.
Silk Road was international and not truly
global because it had not ocean routes that
could reach the American continent.
 INTERNATIONAL TRADING
SYSTEM
According to historians Dennis O. Flynn and
Arturo Giraldez, the age of globalization began
when “all important populated continents
began to exchange products continuously-both
with each other directly and indirectly via other
continents- and in values sufficient to generate
crucial impacts on all trading partners.
 INTERNATIONAL TRADING
SYSTEM
Flynn and Gilraldez trace back to 1571
with the establishment of Galleon Trade.
This was the first time that the Americas
were directly connected to Asian trading
routes.
For Filipinos, it is crucial to note that the
economic globalization began on the
country’s shores.
 INTERNATIONAL TRADING
SYSTEM
A more global trade system emerged in 1867,
following the lead of United Kingdom, the US and
other European nations adopted the gold standard
at an international monetary conference in Paris.
 Its goal is to create a common system that
would allow for more efficient trade.
 The countries thus established a common
basis for currency prices and a fixed
exchange rate system- all based on the
value of gold.
 INTERNATIONAL TRADING
SYSTEM
The global economic crisis called Great
Depression started during 1920s and extended
up to the 1930s, further employing government
coffers.
Some economists argued that it was largely
caused by the gold standard, since it limited
the amount of circulating money, and therefore
reduced demand and consumption.
 INTERNATIONAL TRADING
SYSTEM
Today the world economy operates based
on what are called Flat Currencies,
currencies which are not backed by precious
metals and whose value is determined by
their cost relative to other currencies.