Chapter 1

Chapter 1

1. Components of Global Economy

   • Trade
   • Financial Flows
   • Investment and TNCs
   • Technology, Transport and Communication
   • Division of Labour and Migration

2. Trade

   • measures how g's and s's are consumed around the world
   • grown rapidly
   • trade to high income economies has fallen
   • trade to fast growing economies has increased

3. Financial Flows

   • money moves b/w countries more easily than g's and s's
   • expanded following financial deregulation 1970s-80s
   • FOREX mkt facilitates financial flows
     • ave daily turnover of 4 mill

4. Investment and TNCs

   • surge in FDI since 1980s
   • 2012: developing nations received more FDI than developed
   • TNCs dominate global product and factor mkts
   • responsible for much of FDI

5. Technology, Transport and Communciation

   • communications networks allow money to move around rapidly
   • TNCs couldn't function without communications tech
   • advances in transportation increases labour mobility

6. Division of Labour and Migration

   • how prod. processes are allocated worldwide
   • 200 million people have migrated to work
   • high skilled workers attracted to high income nations
   • low skilled workers attracted to advanced economies
   • barriers to mobility include language, immigration regulations and cultural barriers
   • coorperations can also shift prod. (offshoring)