Chapter 1

Chapter 1

1. Globalization

   • The trend of distinct national economic units toward one huge global market.
   • causes of Globalization
     • 2 main drivers
     • Technology Changes
       • Communication (the web)
       • Transportation
       • Information Processing (Computers)
     • Barriers are reducing since the end of ww2
       • Reduction of trade terrifs
   • the three areas of globalization
     • Markets Consumers Production
     • Markets merging into one global market
     • Production: How easy it is to outsource
     • Consumers becoming a unified culture
       • Technology + Culture = unified culture

2. Super-national organizations

   • IMF
     • Maintains order in the monetary system. (1944).. **Lender of Last Resort**
   • WB
     • 1944- promotes economic development **Remember International Bank for Reconstruction and Development*
     • IBRD
       • International Bank for Reconstruction and Development
   • WTO
     • successor of GATT- ensures that the signing members adhere to treaties.
   • UN
     • Promotes world peace

3. Globalization Debate

   • three major debates
   • Harmful effects on Jobs and income
     • Outsourcing in 2010 of IT jobs reaches 15 billion dollars. 3.8% growth from 2008
     • PRO:
     • CON:
   • Globalization labour policies
     • Firms from 1st world countries take advantage of third world countries. They say that adhering to labor policies enhance costs.
     • PRO
     • CON
   • National Sovereignty
     • transfers powers from governments to super-national organizations. Especially the WTO
     • PRO
     • CON