International Economics

International Economics

1. Globalisation:

   • Globalisation is the process by which the world is becoming integrated through the movement of ideas people, goods, services and capital. Ability to produce a good/ service anywhere using raw materials, capital technology and sell output for profit anywhere.
   • CHARATERISTICS:
     • INC in trade in proportion to world GDP. trade > GDP
     • INC flows of capital & labour b/w countries.
     • INC international specialisation & division of labour. Parts and HQ.
     • INC importance TNC.
     • INC FDI, cross border investment by a firm into an economy. e.g. Bandra Kurla complex in India, TNC FDI.
   • FACTORS/CAUSES:
     • TNC'S- taken advantage of no barriers, set up global organisations. INC flows of goods + labour (outsourcing). e.g. textiles industry of M&S, from UK to Indonesia n 2000.
       • Operate with EOS, INC efficiency.
         • INC integration b/w regions never been predicted. e.g. USA and Japan, SONY & Phillips.
     • FALL IN TRANSPORTATION COSTS- Larger Cargo containers, Boeing 747, INC No. of passengers, lowering costs per person.
       • New ports= new trade routes. e.g. Jebel Ali largest man made port.
         • Significant due to consumer culture, buy goods from anywhere receive within days. Buy goods with low currency
     • TECHNOLOGICAL ADVAN- lower cost of com, INC in availability= low internet costs. establishes link b/w supplier & firm.
       • Internet shopping, online banking, currency barriers = easy flow of goods. Advertisement super bowl .
     • COLLAPSE OF COMMUNISM & OPEN CHINA - countries open to trade, integrated to world trading systems.
       • GROWTH IN TRADING BLOCS- INC trade b/w each other. Low transport costs.
   • IMPACTS:
     • COUNTRIES
       • APPLICATION OF COMPARATIVE ADV
         • INC trade = INC GDP
     • GOVERNMENT
     • WORKERS
     • ENVIRONMENT