GEOG 216 Lecture Notes - Lecture 2: Mccain Foods, Economic Globalization, Berlin Wall
13 Jun 2018
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Lecture 1- Introduction- no notes required
Lecture 2- Geographies of global change
OUTLINE
-Internationalization vs. globalization
-The debate: competing explanations
-Is a global economy new?
-New elements and main actors
-Consequences of globalization?
-Economic globalization: towards a definition
Internationalization vs. globalization
How global is this world economy? How different is our economy from the one 50
years ago?
Economic internationalization: extent to which national economies interact with
one another through the exchange of goods and services.
•Can be measured $
•)ndicators: trade / GDP ratio
•Focus on extension of economic activities across national boundaries i.e., arms
length trade= example: within two respective countries, multiple firms, contained
mainly within our borders, at the end of the day the goods produced are exchanged
to one another. But not much trade before the product is made)
•Quantitative approach to global integration i.e., shallow integration
Economic globalization: involves more than simply increased international trade.
•Set of processes through which economic activities are increasingly interconnected
•functional integration of production activities MNCs(multinationals) Mccain foods
or TNCs (transnational corporations) i.e., global assembly lines
•Emergence of new set of actors on global stage institutions, agreements
•Quantitative + qualitative changes that facilitate deeper global integration
The debate: competing explanations
1) Hyperglobalizers
-Believe our economy has changed so much that there is an emergence of new world
order, ↓ role of nation-state, borderless economy
•Triumphalist accounts: F. Fukuyama, End of history with fall of berlin wall
T. Friedman (the world is flat (earth as a playing field, with decreasing costs of
transportation etc. geography doesnt matter anymore, wherever you are in the
world you can conduct business)
2) Skeptics
-Economic globalization = overblown, a myth or mislabeling of internationalization,
nothing new!
The think the nation-state is still the primary actor in economy
find more resources at oneclass.com
find more resources at oneclass.com
3) Transformationalists (in between the spectrum)
-Globalization = on-going and transformative dynamic open-ended & tensions
•Uneven patterns of development e.g., wealth)
•National economic space ≠ national territorial borders
•Emphasis on local-global connections
They think geography matters more now than it ever did.
)s the global economy new?
-Trade as international integrator, brings together people, cultures, ideas, social
norms, helped form cities, towns, routes,
-Intiquity; Roman empire; Silk road
Went hand in hand with building and consolidation of empires
-Middle ages: new empires, rise of Islam and trade
-Fall of Constantinople and the rise of Europe
Whats new?
-Theres a lot more of everything
-Trade and capital flows comparable to 19thc
-Two key differences
-Type (composition) of trade and capital flows
-market integration- breadth and depth
Key changes in nature of trade and capital flows
We used to think services were non tradable, but now traded more commonly
Trade
-Share of production exported goes up
-Share of exports in services goes up
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find more resources at oneclass.com
-Rise of MNCs 1/3 are in china today
We used to think services were non tradable, but now traded more
commonly
Capital
-Foreign direct investment (FDI) foes up
today many FDI are through MNCs
-We now prefer stocks to bonds
-Shorter-term investment goes up (before investment would take years to
get you back any $$, not anymore, trillions moving around every second)
(Find difference between stocks and bonds)
Market integration
-Commodity markets
-One price rules if you buy something somewhere and then someone buys
something somewhere else the difference of price should ONLY represent the price
of transportation. Think ebay, you pay shipping but price the same everyday
-Financial markets
- Credit, bond and stock markets (new ways to do business)
-% Foreign assets of GDP
-)nterlinked, rapid and optimized interlinked, faster, efficient, BUT risk of
contagion, something happens somewhere it RIPPLES,)
20th C drivers of commercial integration
- Much of work done in 19thC
- Key changes in 20thC
-Trade (re)liberalization (reducing limits put on exchange)
-Liberalization of capital markets
-International governance (they influence global trade)
•GATT/WTO
•)MF
•Trade blocks: EU/NAFTA
•Unilateral world to multilateral world, more and more integrated,
integration both a cause and an outcome
Now we actually have fewer feuds? Because of integration. Even North
Korea is vulnerable to economic sanctions
-Greater degree of connectedness between people, economies, etc.
Global connectedness
1) Trade flows
2) Capital flows
3) Info
4) Migration
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Economic internationalization: extent to which national economies interact with one another through the exchange of goods and services: friedman (the world is flat (earth as a playing field, with decreasing costs of world you can conduct business, skeptics. Economic globalization = overblown, a myth or mislabeling of internationalization, nothing new! The think the nation-state is still the primary actor in economy. Economic globalization: involves more than simply increased international trade. length trade= example: within two respective countries, multiple firms, contained mainly within our borders, at the end of the day the goods produced are exchanged to one another. Believe our economy has changed so much that there is an emergence of new world or tncs (transnational corporations) i. e. , global assembly lines: transformationalists (in between the spectrum) Globalization = on-going and transformative dynamic open-ended & tensions: uneven patterns of development (cid:523)e. g. , wealth, national economic space national territorial borders, emphasis on local-global connections.
